‘Staggering’ BoE expense payments shock legislator

THE BANK of England had paid out “staggering” sums on expenses to two members of its financial policy committee (FPC), a lawmaker from a top parliament committee said yesterday.

US-based policymakers Anil Kashyap and Donald Kohn had between them accumulated £390 000 (R7 million) in travel expenses over two-and-a-half years, said Simon Clarke, a Conservative lawmaker on the treasury committee.

Clarke said this echoed 2009 when politicians’ extravagant expense claims sparked outrage across Britain.

Kashyap and Kohn are external members of the FPC, which monitors the stability of Britain’s financial system.

“One of the most important aspects of the culture of any public institution is that it provides value for money to the taxpayer,” Clarke said.

“Mr Kohn and Mr Kashyap have incurred £390 000 in travel expenses, which is a simply staggering sum. Do you think that’s a sensible use of the bank’s resources?” he asked the new chair of the BoE’s court of directors, Bradley Fried.

“I can certainly say that my constituents would be gobsmacked to hear that Mr Kashyap for example (had) one return flight from Chicago to London for a meeting in February this year (that) cost £11 084.89,” Clarke said.

Fried said the contributions of Kohn and Kashyap to the FPC had been “tremendous”.

“I can’t quite work out a formulaic assessment of value for money against their participation versus the travel expenses, but I hear exactly what you say,” Fried said, adding that the BoE would dwell on this. BoE records show Kohn, a former vice chairperson of the US Federal Reserve, has claimed £274 568 in expenses between December 2015 and February 2018.

Kashyap, a professor of economics and finance at the University of Chicago Booth School of Business, has claimed £116 742 between October 2016 and February 2018.

Kashyap and Kohn are external members of the FPC, brought in for their experience outside the BoE.

The expenses of external FPC members who are based in Britain are minuscule by comparison. – Reuters