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A ‘desperate’ U.K. beckons for bankers to follow Carney

Mark Carney has raised the profile of Canadian bankers.


Mark Carney may not be the only Canadian banker headed to London. A British banking expert predicts that several of Mr. Carney's countrymen in the financial sector will be lured to England as Canadian bankers suddenly find themselves in high demand.

Michael Lafferty, executive chairman of the U.K.-based International Academy of Retail Banking, said Mr. Carney's recent appointment as governor of the Bank of England has heightened interest in recruiting Canadian bankers in the U.K.

Headhunting efforts for top executives in Canada have already began, Mr. Lafferty said, with a focus on retail banking – that slow and steady brand of personal and commercial lending that has made Canadian financial institutions among the world's most stable.

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"My prediction is that we will see several – at least two if not many more – senior Canadian retail bankers taking up positions in the British banks within a year, because Britain is so desperate," Mr. Lafferty said in Toronto, where he was recently meeting with executives at Canadian banks.

A push to repair the tarnished reputation of the United Kingdom's banks after a series of high-profile scandals in recent years, such as the fixing of interest rates and money laundering, has heightened the need for fresh executive blood, Mr. Lafferty asserted.

"If you're trying to reform British banking – and it definitely needs reform – where do you go? You have to look outside Britain. You have to go outside Ireland ... Brand Canada is in very high standing. I can't think of a country that would have a higher status brand [right now]," Mr. Lafferty said.

His comments came during a visit to Toronto where he was meeting with Canadian banks about plans to introduce standardized training and certification for retail bankers around the world, similar to the accounting and law professions. The program, which could be implemented soon at some of Canada's biggest banks, is already in use in other countries and has gained traction since the 2008-09 financial crisis exposed problems in the industry, such as aggressive subprime lending.

The surging appeal of Canadian bankers overseas is part of why Mr. Carney, as Governor of the Bank of Canada, was hand-picked by the U.K. to run the Bank of England. He will take up the post on July 1, becoming the first foreigner to run the Bank of England in its 318-year history.

Part of Mr. Carney's mandate will be to put a fresh face on British banking. But it remains unclear whether U.K. banks will be able to lure Canadian executives, although overtures are already being made. While more compensation and the prestige of a grander title could be dangled, the waters of Canadian retail banking are comparatively calm, compared to the tumultuous British banking scene.

One top Canadian bank executive interviewed for this article, who requested anonymity, said he would be unlikely to make the jump if offered an equivalent job in London. British banking could be fraught with pitfalls when scandals erupt. Further, with regulatory and public pressure on reducing compensation for top bankers in England right now, the jobs are less attractive than in Canada, the person said.

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However, the executive agreed with Mr. Lafferty's assertion that headhunting is under way, and said he could see the possibility that bankers looking to rise up the ranks, especially those in the retail side of the bank, would consider the jump if it meant better opportunities and a promotion. "Some people might look at it as a chance to move up," the person said.

The most high-profile Canadian executive to jump to the U.K. financial sector was former Bank of Montreal chairman Matthew Barrett. The Irish-born banker left BMO in 1999, after a 37-year career in Canadian banking, to join Barclays Bank PLC, where he served as group chief executive and later chairman. He left Barclays in 2006.

In July, Barclays executive Jerry del Missier, a Canadian who moved to London early in his banking career after a stint in the derivatives group at Bank of Nova Scotia, became the poster child for one of Britain's biggest banking scandals. Mr. del Missier, a native of Sudbury, Ont., who served as chief operating officer at Barclays, was said to be in contention for the CEO job, before the bank became embroiled in a rate-fixing scandal over the London interbank offered rate, known as Libor. Mr. del Missier was one of several Barclays executives who soon departed the bank.

While investment banking is prone to scandals, Mr. Lafferty said British banks want to tap the Canadian ethos on retail banking. "Your banks, in general, haven't done really stupid things. From time to time, a bank will get into a bit of trouble, but nothing like what's happened in the U.K., Ireland, Holland, Belgium or Germany," he said.

As Bank of Canada Governor, Mr. Carney has talked up the stability and lack of scandals of Canadian banking. At a speech this week in London, Ont., Mr. Carney called upon the banking sector to return to core values at a time when public confidence has been eroded after the credit crisis.

"Virtue cannot be regulated. Even the strongest supervision cannot guarantee good conduct. Essential will be the rediscovery of core values, and ultimately this is a question of individual responsibility," Mr. Carney said. "Bankers need to see themselves as custodians of their institutions, improving them before passing them along to their successors."

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