Dozens of “serious” compliance breaches have been uncovered at the Bank of England, despite progress being made to fix shortcomings since hedge funds exploited the central bank’s audio feeds four years ago.
A report by public spending watchdog the National Audit Office (NAO) examined the Bank’s actions to improve its response to non-financial risks and whether lessons were learned from two high-profile scandals. .
These include the resignation of Deputy Governor Charlotte Hogg in 2017 for failing to declare that her brother worked at Barclays, and the December 2019 claim that hedge funds were given early access to audio feeds of press conferences from both banks. It included an embarrassing security breach.
While the NAO said the central bank had made “good progress”, it warned that there had been an unacceptable level of non-compliance with the central bank’s own staff policies in the 12 months to August 2023.
These include 28 serious violations, as serious as failing to disclose conflicts of interest that could affect the independence of senior officials and could lead to disciplinary action. be.
It also included 628 minor violations, such as employees not getting prior approval for personal transactions such as mortgages and investments, or emails being sent to the wrong address. there is a possibility.
This is up from 584 minor breaches and 19 major breaches the previous year.
Most of the breaches are self-reported, but the numbers are “above what the Bank considers acceptable levels,” the NAO said. A 2023 staff survey also found that only 59% of central bank staff felt free to express their opinions without fear of negative consequences.
Gareth Davies, NAO’s Comptroller and Auditor General, said: “The Bank of England has clearly made good progress in developing new and improved systems for understanding and managing compliance risks. ”.
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“As we move forward with this effort, the Bank should continue to improve the quality and consistency of risk information and ensure the recognition and trust of staff who raise concerns.”
Bank of England Tribunal Chairman David Roberts welcomed the NAO’s report, saying the central bank is “committed to promoting the highest standards of integrity and ethics and will consider the NAO’s recommendations carefully”. .
