Carney gets ball rolling on Bank of England governorship

London Briefing: incoming head of British central bank starts by appointing new number two

Incoming governor of the Bank of England Mark Carney  is bringing Bank of Canada’s chief spokesman to London with him, in a two-year secondment that could signal a more open style of communications under his leadership. Photograph: Reuters/Michael Buholzer

Incoming governor of the Bank of England Mark Carney is bringing Bank of Canada’s chief spokesman to London with him, in a two-year secondment that could signal a more open style of communications under his leadership. Photograph: Reuters/Michael Buholzer

Wed, Jun 19, 2013, 01:00

Mark Carney does not take up his role as governor of the Bank of England until next month, but he has already made what may well prove to be one of the most significant appointments of his administration – the recruitment of a chief operating officer.

The position, a new one at the British central bank, has gone to the highly regarded Charlotte Hogg, poached from the Spanish banking group Santander which she joined only a couple of years ago as head of retail distribution.

The appointment of a woman to such a senior post goes some way to addressing the glaring gender imbalance at the top at the Bank of England – for example, not a single member of its nine-strong monetary policy committee, which sets interest rates, is female.

The last woman to serve on the MPC was Kate Barker, who left in May 2010, and only four women have served on the committee since it was set up 16 years ago.

Hogg, 42, joins the Bank on July 1st, the same day as Carney, and will effectively be number two to the governor, although the bank said yesterday the new chief operating officer “will have status and remuneration equivalent to the three deputy governors”.


Day-to-day management
As chief operating officer, Hogg will be responsible for all aspects of the day-to-day management of the bank, including human resources, finance, property, IT and security.

Although he has yet to arrive in Threadneedle Street, it was Carney who made the appointment and his new hire will clearly play a key role in the changing direction of the Bank as its powers are extended to include not only monetary policy but also financial regulation, making it one of the most powerful central banks in the world.

It has also emerged that Carney is bringing Bank of Canada’s chief spokesman to London with him, in a two-year secondment that could signal a more open style of communications under his leadership.

Commenting on Hogg’s appointment yesterday, and on the “significant transition” ahead for the Bank, Carney said she brings “an outstanding track record and breadth of experience that will help to catalyse that change.”

The new chief operating officer shares the same educational track record as her new Canadian boss – Oxford and Harvard – and certainly has an impressive pedigree: her father is the former Tory minister Douglas Hogg, Viscount Hailsham, and her grandfather was Tory grandee and former lord chancellor Lord Hailsham.

Her mother is Baroness (Sarah) Hogg, the former journalist who, in 2001, became the first woman to chair a FTSE 100 company.

It’s a triumphant return to Threadneedle Street for Hogg, who joined the bank as a graduate entrant in 1992, but left two years later to work for McKinsey in Washington. Stints at investment bank Morgan Stanley and the credit checking company Experian followed before joining Santander.

Returning to the Bank is unlikely to be as lucrative as her previous posts, however. Deputy governors at the Bank are paid a salary in the region of £260,000 – frozen since 2010 – and do not receive bonuses.


Farewell to King
It should be smiles all round at the Mansion House in the City of London tonight as chancellor George Osborne puts aside any past differences to pay tribute to the departing bank governor Sir Mervyn King.

The occasion will serve as a stylish farewell to Sir Mervyn – as well as allowing the chancellor to outline his latest thinking on the government’s plans to offload its stakes in Lloyds Banking Group and Royal Bank of Scotland.

King’s farewells are unlikely to be as lavish as those accorded his successor, however. Carney has attracted serious flak in his native Canada in recent weeks for the scale of his goodbyes – one newspaper totted up the cost of his farewell bashes at $30,000, including “canapes, fine wine, floral arrangements and a harpist”.


Raised eyebrows
In the UK, Carney’s salary has raised eyebrows – at nearly £1 million, it is significantly higher than that earned by King.

Even Carney’s British-born wife Diana has had a taste of the scrutiny her husband will be subjected to once installed at the Bank, after she tweeted a link to a story about how plans to tax the rich in France are being scaled back with a comment saying “Maybe I’ll be able to find a place in London after all.”

As the Bank is giving the new governor a housing allowance of £250,000 a year, Mrs Carney’s lament over the cost of finding a home in the capital did not go down well.


Fiona Walsh is business editor of guardian.co.uk