(Corrects spelling of Sentance in eighth paragraph)
LONDON, July 30 (Reuters) - New Bank of England rate-setter Gertjan Vlieghe should reassure parliament that his ongoing financial link to one of the world’s biggest hedge funds does not pose a conflict of interest, a senior legislator said on Thursday.
Vlieghe will give up his partnership at Brevan Howard Asset Management, whose traders bet on interest rate moves, before he joins the BoE’s Monetary Policy Committee on Sept. 1.
But the 44-year-old former central bank economist will continue to receive payments based largely on how much money Brevan Howard manages.
The BoE and the country’s finance ministry have said the arrangement would not pose a conflict of interest.
Andrew Tyrie, a Conservative lawmaker who chairs the parliament committee which vets the BoE, said he would seek reassurance from Vlieghe about this when he appears before the committee for a regular appointment hearing.
“It is essential that the MPC is -- and is seen to be --independent,” Tyrie said.
“It is also important that judgement is exercised in the application of rules covering such possible conflicts of interests to ensure that the MPC can have access to the widest relevant expertise,” he added.
Former Bank of England policymaker Andrew Sentance said on Wednesday that strict rules on outside financial interests could have the side-effect of acting as a disincentive for people to join the BoE from the private sector.
Tyrie’s committee has no power to veto Vlieghe’s appointment, but any criticism of Vlieghe’s financial arrangements would be embarrassing for the BoE and finance minister George Osborne, who approved his appointment.
Last year Tyrie raised concerns about the investment activities of Richard Sharp, an external member of the BoE’s Financial Policy Committee also appointed by Osborne. The BoE subsequently tightened its code of conduct for policymakers. (Reporting by David Milliken; editing by William Schomberg)