Bank of Canada says Carney, who will replace Mervyn King, did not breach rules over holiday stay with opposition leader
The incoming governor of the Bank of England, Mark Carney, has been cleared of a conflict of interest after the Canadian central banker holidayed at the Nova Scotia home of an opposition party leader.
The Bank of Canada said Carney, who will take over from Sir Mervyn King next summer, was cleared of breaching rules despite a report that he stayed for a week in the home of a senior Liberal politician while the opposition party was seeking to recruit him.
Carney’s flirtation with party politics could ruffle feathers at the Bank of England, where central bankers are expected to stay out of politics to maintain their reputation for independence.
According to reports in the Toronto Globe and Mail, Carney and his family stayed at the home of the Liberal MP Scott Brison’s home in Nova Scotia during part of their summer holiday.
The Bank of Canada spokesman, Jeremy Harrison, said Carney and Brison had been personal friends for about a decade.
“The Bank of Canada’s general counsel, who is responsible for enforcing the bank’s conflict of interest policy, has assessed that this visit does not breach the bank’s conflict of interest guidelines in any way,” Harrison said in a statement.
“Neither the Bank of Canada, nor Governor Carney, have an actual or potential commercial or business relationship with Mr Brison,” the statement said. “Mr Carney’s acceptance of hospitality provided by a personal friend does not arise out of ‘activities associated with official bank duties’. Nor can it be defined as partisan or political activity.”
The Globe and Mail newspaper reported that Brison, along with a number of other senior party members, had expressed interest in seeing Carney lead the Liberal party.
Carney was a surprise appointment last month when the chancellor, George Osborne, said he had spurned applications from senior UK regulators and bank officials in favour of the Bank of Canada governor.
Osborne said Carney was the “the outstanding central banker of his generation”, and “a person of real quality” who would serve at the Bank of England for five years from next July.
Little was known about his record other than he spent 13 years at investment bank Goldman Sachs before a meteoric rise at the central bank of his native Canada.
In public, Carney has repeatedly batted away questions about any political ambitions, at one point saying at a news conference in October: “Why don’t I become a circus clown? I appreciate the great concern about my career but I have gainful employment and I intend to continue it.”
But the latest revelations have led to criticisms from some commentators, who say there are risks that the central bank’s impartiality could be called into question if officials are linked too closely to politics.
The bank’s conflict of interest guidelines urge employees to avoid the appearance of impropriety in accepting hospitality or gifts.
“It does show a complete lack of judgment,” said Mike Moffat, an economist at the Ivey school of business at the University of Western Ontario.
“The larger issue here is that Carney is being seen as the guy who can do no wrong,” Moffat said. “For the most part, he’s been a very strong governor. There’s some point where you start to believe that anything you do is justified because you’ve been doing such a great job and that’s where these sort of ethical lapses get in.”