The Bank of England has appointed Charlotte Hogg as its second most powerful executive, in a role that hands the former financier the task of keeping a check on Britain’s financial sector.
Hogg has been appointed deputy governor for markets and banking, while consolidating her position at Threadneedle Street by retaining her current role as the central bank’s chief operating officer. She replaces Minouche Shafik, who is becoming director of the London School of Economics.
Chancellor Philip Hammond said: “I’m confident that her exceptional leadership skills and wide-ranging experience make her the right person to take on the position. Charlotte has done an excellent job as the Bank’s first chief operating officer. She will take over this new role at a key time for the City.”
Hogg, 46, was brought into the bank in 2013 from the banking group Santander by governor Mark Carney to shake up the organisation, which he said needed to be more transparent and communicate its policies more clearly. Carney also wanted Hogg, who had previously spent 10 years at the US investment bank Morgan Stanley, to help him promote diversity in an organisation many believe had changed little in its 323-year history.
Carney said: “Many of the top priorities in markets and banking currently coincide with those of the Bank’s central operational areas, meaning Charlotte is the ideal person to lead these efforts … her breadth of financial sector and operational experience will contribute valuable, broader perspectives to the Bank’s policy committees”.
Although Hogg lacks Shafik’s international connections at organisations such as the International Monetary Fund, the privately-educated, Oxford graduate will wield considerable experience of the domestic financial sector when she takes up her new position at the end of the month. She will sit on the monetary policy committee, the financial policy committee, the Bank’s court of directors and the board of the main City regulator, the Prudential Regulation Authority.
Among her tasks will be to manage the Bank’s strategy during the Brexit negotiations, which could prove to have serious consequences for the City and the banking sector. Several banks have criticised regulators for tightening rules and issuing large fines for bad behaviour. The chairman of Barclays, John McFarlane, hit out last year against the £20bn in fines and taxes imposed on the Bank, forcing it to cut its dividend.
In an intervention that flagged the lobbying power of the City, the chair of the Treasury select committee, Andrew Tyrie, warned in 2015 against bending to “special pleading” by banks after the Treasury moved to dilute measures to make top bank bosses more accountable.
As well as her financial experience, the Oxford economics graduate is steeped in British politics through her family. Both Hogg’s parents had leading roles in Sir John Major’s government and her grandfather, Quintin Hogg, was a prominent Tory who almost won the Conservative party leadership following the resignation of Harold Macmillan.
Her father, the Tory MP Douglas Hogg, served in the cabinet from 1995 to 1997. He stepped down in 2010 after more than 30 years in the Commons and now sits in the Lords as the 3rd Viscount Hailsham. Her mother, Sarah Hogg, is a crossbench peer. Charlotte Hogg was a economics journalist and TV presenter before heading John Major’s policy unit in the mid-1990s.
The appointment comes as the Bank faces the loss of another prominent woman following Kristin Forbes’s decision on Thursday to turn down a second term as a member of the MPC and return to her native US.
Forbes has built a reputation as a tough operator who believes that the Bank should begin to withdraw its economic stimulus before the end of the year to combat rising inflation. This view contrasts with the majority of MPC members who are expected to support historically low interest rates well into 2018.
Carney is expected to search for a replacement for Forbes that maintains the gender balance to keep on track his campaign to widen access beyond an old boys’ club of senior officials.
In a speech on Thursday, he said he not only wanted to meet targets for more women and black and minority ethnic staff at the bank, but recruit graduates from outside Oxford and Cambridge and from poorer backgrounds.
He said: “Homogenous groups that pay insufficient attention to minority views are vulnerable to biases, groupthink and overoptimism. They are more likely to be influenced by the way information is presented; and to stick with underperforming projects because of prior investments.
“Diverse groups can overcome these ills as they are more inclined to consider novel ideas and challenge each other, enabling them to infer cause and effect and to solve problems better.”
• This article was amended on 13 February 2017. An earlier version said Douglas Hogg stepped down as an MP in 2010 to become the Viscount Hailsham. He succeeded to the viscountcy in 2001, and joined the House of Lords in 2015 after being given a life peerage.
