BBC Chair Richard Sharp Previously Put on Bank of England Watchdog Committee Despite Lucrative Conflicts of Interest

When questioned, a spokesperson for Richard Sharp referred Byline Times to the Bank of England

BBC Chairman Richard Sharp sat on one of the Bank of England’s key financial watchdogs while potentially making millions from conflicting business interests, Byline Times can reveal.

Sharp, who became chair of the BBC in 2021 weeks after allegedly helping former Prime Minister Boris Johnson secure an £800,000 loan – a claim that Sharp denies – was an external member of the Bank’s Financial Policy Committee (FPC) between 2013 and 2019, when he was also the Chairman of ‘Special Situations’ private equity fund RoundShield Capital.

RoundShield Capital invests some £2.54 billion on behalf of pension funds, endowments, foundations and other institutional investors into distressed businesses or new ventures. These enterprises are backed by underlying assets but are considered too risky to secure normal bank loans. There is nothing contrary to law about this sector, or Sharp’s work in it.

At the same time, Sharp’s FPC enjoyed binding powers over the BoE’s Prudential Regulation Authority (PRA) – the body that sets the minimum levels of capital banks need to hold in reserve, affecting their ability to lend money for riskier opportunities.

A City source told Byline Times: “Special Situations Investment Funds generate high returns of between 10% and 25% a year by providing capital for opportunities where bank finance is unavailable.  

“The conflict of working for a Special Situations fund while being in a position to affect the amount of bank debt available, the level of risk the regulator indexes for a type of loan, and the changes in the risk associated with the industry of the borrower, plainly leaves the powers of the FPC open to the perception that they could be abused.” 

The source added: “An inside knowledge of how the Committee view risks in the credit markets, what’s on the financial horizon, and how it may use its powers to loosen or restrict access to debt, would give a huge edge to a Special Situations lender. 

“Not only would it signpost where opportunities are likely to be found it would give insights into how to set the cost of non-bank debt.”

There is no suggestion of wrongdoing by Sharp, who is on record declaring his interests in RoundShield – which is regulated by the Financial Conduct Authority through its affiliate RoundShield Partners LLP – along with two other regulated companies, DII Capital Advisors and SW7 Asset Management.

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Risk and Reward

However, the Bank of England (BoE) is facing scrutiny over its Code of Conduct rules, which allow external members of the powerful FPC to have interests even where they create a “perception that a Committee Member… may obtain an unfair advantage… for example, by assumed access to information or policy thinking.”

Instead, the BoE says it seeks to “manage” such conflicts of interest by making judgements on a “case by case basis”, and requires members to self-declare conflicts so that they can be “recused” from any relevant “meeting or item discussion”.

A BoE spokesperson said: “All members of the Financial Policy Committee (FPC) are subject to a code of practice on managing conflicts of interests.

“This sets out the principles, guidelines and procedures for identifying, monitoring and managing actual or potential conflicts of interest.

“The code requires FPC members to declare any business interests that might be seen to create such a conflict to the Committee.”

Byline Times has examined the Code, which states that “relevant factors” to consider in the case of conflicts of interest include whether access to FPC information is likely to be commercially valuable to the areas of business its members are involved in. 

Companies House documents for 2021, the last year in which Sharp was a member of RoundShield LLP, showed that some £5.4 million in profit was available for division between seven members, with the largest individual entitlement set at almost £2.2 million.  

In 2020, Sharp was