Mark Carney, Governor of the Bank of Canada, holds a press conference to discuss the contents of the Monetary Policy Report at the National Press Theatre in Ottawa on Wednesday, October 26, 2011.Sean Kilpatrick/The Canadian Press
Bank of Canada Governor Mark Carney has added a central figure from this summer's downgrade of Washington's cherished triple-A credit rating to his team of special advisers, appointing Standard & Poor's analyst David Beers to an 18-month stint as of Feb. 1.
Mr. Beers, who is currently based in London, is S&P's global head of sovereign and international public finance ratings, and spent much of August giving media interviews explaining and defending the agency's decision to downgrade the United States. The 58-year-old native of Rockville Centre, Long Island, has worked at S&P since 1990, serving in many capacities including as the agency's Canada analyst.
At the central bank, Mr. Beers will advise Mr. Carney's policy team on issues linked to sovereign debt as well as how to spot and fix threats to the financial system, Mr. Carney said in a statement released late Tuesday afternoon.
Mr. Carney has always been a forceful champion of efforts to overhaul international financial rules so that future meltdowns can be prevented, and the Group of 20 nations is expected this week to name him Chairman of the Financial Stability Board, a global body tasked with co-ordinating that work and ensuring that governments implement the changes they've agreed to undertake.
"(Mr. Beers's) wealth of experience will be invaluable to the Bank as we build further our capacity to assess macro-financial vulnerabilities," Mr. Carney said. "David's expertise and unique perspective on global capital markets will also augment the Bank's contributions to global regulatory reform."
In an interview Tuesday from New York, Mr. Beers said Mr. Carney – whom he has known since the central banker's days an investment banker with Goldman Sachs – approached him in March about becoming a special adviser. On top of his expertise on rating sovereign-debt risk, Mr. Beers said he also has written extensively on the demographic challenges faced by governments at all levels as populations age – "issues that will endure beyond the current challenges."
Derek Holt, a senior economist at Scotia Capital, cheered the appointment of Mr. Beers, saying the central bank "will benefit enormously from his reputation for thorough, detailed work on sovereign finances,'' which will be particularly valuable given that the nature of the crisis and recovery suggests monetary policy will need to increasingly take into account the impact of sovereign debt on financial stability and economic growth.
Since the position was created in 1998 to bring outside perspectives to the central bank's policy-making, most special advisers have come from the academic world. Mr. Beers is the latest adviser under Mr. Carney to come with extensive experience in the financial world, where the Governor spent much of his adult working life. In June, 2010, Mr. Carney tapped Tim Hodgson, who was CEO of Goldman's Canadian operation, to a similar 18-month gig.
Mr. Beers, however, is more well-known. Through much of August, he was the public face of S&P as it responded to criticism from members of U.S. President Barack Obama's administration and investors including Warren Buffett, who disagreed with the downgrade and blamed the agency's decision for the market volatility in the weeks that followed.
Mr. Beers argued then that it was an "oversimplification" to say markets were reacting to just the downgrade and on Tuesday said he stands by those comments.
"There were broader forces at work driving the equity markets globally then, as now," he said in the interview. "I think anybody who tracks the equity markets going back to July, which was before the downgrade on Aug. 5, there were a number of factors that were driving the negative market sentiment. The downgrade was one, but it was certainly not the only factor driving the markets."