15:06

Back in parliament, Bank of England deputy governor Ben Broadbent also had his reappointment hearing today, following up on Michael Saunders’ appearance in front of the Treasury select committee this morning.

Broadbent, who is one of the frontrunners to succeed governor Mark Carney next year, was tight lipped about whether he had applied for the job.

However, he said the Bank’s next leader should follow in Carney’s footsteps by continuing to modernise the 300-year-old institution (while of course fulfilling its remit for financial and price stability.) Gender and ethnic diversity also seemed to be on the agenda.



The deputy was immediately peppered with questions over the suspension of Neil Woodford’s investment fund, but Broadbent said he doesn’t think the episode had spilled over to other funds or financial markets “so far as we can tell.”



Neil Woodford refuses to waive fees despite pressure from MPs and FCA Read more

He said there will be episodes where investment fund suspensions “is the right thing to do”.



He told MPS:

“The real financial stability risk in some ways will come from funds having to liquidate assets very quickly at values that are well below their market price, and that’s precisely what suspensions are designed to prevent.

Broadbent said there may be questions over whether investors are sufficiently aware of the risks involved in investing in open-ended funds like Woodford. He also addressed the manager’s listing of private holdings on the Guernsey stock exchange to get around EU rules that cap unlisted investments at 10%. “There were no rules broken as far as I understand it,” Broadbent said.

But the Bank’s deputy governor ultimately came to the defence of City regulator the Financial Conduct Authority, which he said could not be expected to safeguard customers to the point where they faced little to no risk.