Dozens of “major” compliance breaches have been unearthed at the Bank of England, despite progress to fix shortcomings after misuse of the central bank’s audio feed by hedge funds four years ago.
The report by the National Audit Office (NAO), the public spending watchdog, reviewed the Bank’s actions to improve the handling of non-financial risks, and whether it had learned lessons from two high-profile scandals.
That included the 2017 resignation of deputy governor Charlotte Hogg, who failed to declare that her brother worked for Barclays, and an embarrassing security breach in December 2019 that gave hedge funds early access to audio feeds of the Banks press conferences.
While the NAO said the central bank had “made good progress” it warned there had been an unacceptable level of compliance breaches of the Bank’s own staff policies over the 12 months to August 2023.
These included 28 major breaches, which can be as serious as failing to disclose a conflict of interest that can affect a senior official’s independence, and can result in disciplinary action.
They also involved 628 minor breaches, which can refer to an employee’s failure to get advanced approval for personal transactions including mortgages or investments, or emails being sent to the wrong address.
It marked a rise from the 584 minor – and 19 major – breaches in the previous year.
While most of the breaches were self-reported, the NAO said the figures were “above what the Bank considers an acceptable level”. A 2023 staff survey also found that only 59% of the central bank’s staff felt they were free to speak up without fear of negative consequences.
The NAO’s comptroller and auditor general, Gareth Davies, said it was clear “the Bank of England has made good progress in developing new and improved systems to understand and manage compliance risks.
“As it takes forward this work, the Bank should ensure it continues to improve the quality and consistency of its risk information, and awareness and confidence among staff to raise concerns.”
David Roberts, the chair of the Court of the Bank of England, said he welcomed the NAO report and that the central bank was “committed to promoting the highest standards of integrity and ethics and will carefully consider the NAO’s recommendations”.
