Bank of England targeted over diversity deficit among senior staff
The Bank has been left with one female on its nine-strong interest rate setting committee.
Chancellor Philip Hammond may be hauled in front of an influential committee of MPs to address concerns over a worrying lack of diversity among the Bank of England’s most senior staff.
Treasury Select Committee chair Nicky Morgan has penned a letter to the Chancellor asking for evidence proving that “all efforts” are being made to encourage gender and ethnic diversity in its recruitment process.
It follows the appointment of two new members to the Bank’s Monetary Policy Committee (MPC), which has left only one female on board and raised concerns about a gender imbalance on the interest rate-setting body.
While the Treasury Select Committee has approved both appointments, Ms Morgan said it had discussed “wider concerns about the composition of the policy committees, and in particular about diversity at the most senior levels at the Bank of England”.
Ms Morgan is now asking the Chancellor for “specific confirmation that all efforts are being made to encourage as diverse a range of candidates as possible” and that recruitment processes for the Bank’s policy committees follow rigorous standards used for other public appointments.
The letter requests that the Treasury publish recent historical data, including a gender breakdown of applicants vying for membership on the MPC and Financial Policy Committee (FPC).
Ms Morgan said that her committee “would be interested in taking evidence” from Mr Hammond or the “most appropriate minister or senior official” to address the issue shortly.
She added: “The Committee has taken the opportunity to emphasise that, when considering appointments within its remit, it expects candidates to have a proven track record in the area to which they have been appointed, as well as demonstrable personal independence.
“In the future, the Committee expects to be provided, prior to appointment hearings, with diversity data on the candidates applying to the associated position.”
The Bank of England had two female members on the MPC just earlier this year.
Charlotte Hogg replaced outgoing MPC member Minouche Shafik this spring, temporarily keeping two women on the committee. But Ms Hogg failed to declare a conflict of interest, as her brother worked for Barclays, forcing her resignation shortly after her appointment.
Kristin Forbes has since stepped down after completing her own term, leaving recently appointed Silvana Tenreyro the only woman on MPC, while Sir Dave Ramsden filled the other open role.
A Treasury spokesperson said: “We are pleased the Treasury Committee has agreed to the appointments of Professor Silvana and Sir Dave.
“Our recruitment process is fair and open for senior appointments to the Bank of England, but we recognise there is still more to do to improve diversity.”
In his own grilling in front of the Treasury Select Committee this week, Sir Dave was asked whether he thought a woman was equally capable of taking on his role as deputy governor of markets and banking.
“There are definitely women capable of doing my job, of doing the governor’s job, of doing my old job at the Treasury,” he responded.
“I think there is a real issue with the gender balance in economics. It’s two-thirds male, one-third female. The problems go all the way back to schools – why girls don’t do A-level economics, why young women don’t go and study economics at university,” Sir Dave responded.
He said it goes back to the “culture of economics”.
“There’s a live debate in the US at the moment, about the behaviours of economists that plays into this that may be deterring women from applying.”
He added that it was “collectively” up to organisations including the Treasury, Government and Bank of England to address, and that it was worth considering that the position could be filled by a professional with a non-economics background, noting that law attracts far more females to its ranks.
The Treasury Select Committee this week launched a separate inquiry into the barriers that women face in entering and progressing in the financial services industry.
Governor Mark Carney, who also faced MPs this week, revealed a snippet of a review into gender pay at the Bank, which will be published next month.
The median gender pay gap is 24%, the mean pay gap is 21% but on an equal work for equal pay basis, Mr Carney said there is no gap.
He said the gulf exists because there are more men in senior positions at the Bank than women.