Carney faces scrutiny over MPC member's independence

New MPC member Gertjan Vlieghe has faced scrutiny over continued ties to hedge fund Brevan Howard, where he was a partner.

Last month, Vlieghe said cut all links to Brevan Howard to avoid "any mistaken impression" of a conflict of interest. He had wanted to retain a financial interest in the firm which would allow him to receive long-term incentive payments based on the hedge fund’s size.

Yet despite reassurance from Vlieghe and the Bank of England that his outside financial interests did not pose a conflict of interest, Tyrie has called for Carney to undertake a review of the Code of Conduct for MPC members.

In his letter to Carney, Andrew Tyrie said:

"The appointment of Dr Gertjan Vlieghe to the Monetary Policy Committee (MPC), and the subsequent need to remove any perception of a conflict of interest between that role and his stake in Brevan Howard, suggests that the Code of Conduct for MPC members would benefit from re-examination. I am writing to ask that you undertake a review of the Code of Conduct and let the Treasury Committee know your progress with it.

"It is essential that those appointed to the MPC have no conflict of interest, nor perception of them. A well designed Code of Conduct, sensibly applied, should be capable of achieving this without diminishing the quality of applicants."

Vlieghe replaces Professor David Miles who, after six years on the committee, comes to the end of his extended second term at the end of August.

Vlieghe will be appointed for an initial three year term which will take effect from 1st September, holding one of nine votes to decide the future path of UK monetary policy.