Carney: Hogg's mistake should not mean tougher rules for bank bosses

Carney: Hogg's mistake should not mean tougher rules for bank bosses

Hogg, promoted from chief operating officer only on 1 March, had told MPs that she had disclosed Quintin Hogg's role in line with the code of conduct she had herself drawn up.

Mr Carney also said that "recent events" should not result in tighter industry standards, which, he said, risks driving away qualified senior bankers.

Speaking at the same event, William Dudley, president and chief executive of the Federal Reserve Bank of NY, said that if the industry wants to improve culture and conduct, "we need to start by being realists about human behaviour". There were consequences for her compensation. "While she couldn't forfeit a bonus, as Bank of England governors cannot receive one, she waived her salary increase this year", said Carney.

He said the verdict of the MPs, who concluded her "professional competence falls short of the very high standards" required, had "triggered Charlotte Hogg's decision to resign".

He said he wanted "to dispel the urban myth that has developed around these events".

Carney said the BOE took proportionate and serious action after Hogg's breach was discovered.

"He said that could make it harder for City firms "to find candidates of sufficient calibre willing to take on senior roles" and added that there should not be a "'one strike and you are out' regime for an honest mistake".

"Proportionate means taking into account the severity of the incident, the track record of the individual and their firm, as well as the firm's wider response".

"That could have senior managers running scared, drive compliance underground and undermine our collective objectives".

Global bank misconduct costs have totalled more than 320 billion United States dollars (£256.7 billion), a total that Mr Carney said could have supported up to 5 trillion U.S. dollars (£4 trillion) in lending to households and businesses.

The governor said he spoke to the CEOs of major banks last week to reassure them that regulator's enforcement of SMR rules on their executives would not be as harsh as Hogg's treatment.

"We were clear upfront that there must be consequences for both her and the Bank", the governor said during a Banking Standards Board panel in London, marking his first public comments since Ms Hogg resigned last week.