Carney’s ex-colleague earns £1,500 a day for Co-op probe
A FORMER colleague of Bank of England Governor Mark Carney will be paid £1,500 per day to conduct an independent review of how the Co-op Bank was regulated before its near collapse in 2013.
The Bank’s Prudential Regulation Authority (PRA) detailed the daily rate for Mark Zelmer in an update to Economic Secretary John Glen, who called for the investigation earlier this year.
Mr Zelmer will conduct most of the investigation from Ottawa, Canada, where his pay will equate to more than 2,600 Canadian dollars per day based on current exchange rates.
He will also have the support of a team from Grant Thornton UK.
The investigation must be completed within one year of Mr Zelmer’s appointment, which was finalised in March.
The former Bank of Canada employee was a colleague of Mr Carney, having overlapped during the latter’s five-year stint as the central bank’s governor from 2008-2013.
However, the PRA has said that Mr Zelmer never directly reported to the Governor but did work with him on “some parts of the Governor’s agenda”.
“After careful consideration, we concluded that any risk of a perceived conflict of interest in this regard is minor and manageable. We understand that the Treasury shares this view,” the PRA said in letter to the Treasury Select Committee chair Nicky Morgan in March.
Mr Zelmer’s probe will look at the “actions, policies and approach” of UK regulators responsible for the supervision of the Co-op Bank – including the PRA and Financial Conduct Authority’s predecessor the Financial Services Authority (FSA) – between May 2008 and November 2013.
It covers a period of turmoil for the Co-op Bank, including its aborted bid to buy 632 branches from Lloyds Banking Group in 2013. The bank nearly collapsed that same year, dragging down the wider Co-operative group to a £2.5bn annual loss after a £1.5bn hole was discovered in the lender’s balance sheet. There was further damage to the bank’s reputation after a drugs scandal involving former bank chairman Paul Flowers, an ex-Bradford councillor.