CORRECTED - OFFICIAL-UPDATE 2-Bank of Canada secret documents stolen

Wed Nov 17, 2010 4:35pm EST

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(Corrects sixth and seventh paragraph and third bullet item, removing Flaherty's comment that the documents had been recovered, after a spokesman said the minister had been misinformed by staff)

* No market-moving documents were among stolen items

* Security procedures under review at central bank

* Flaherty says Carney a crime victim, no reproach needed (Updates with fresh comments from finance minister)

By Louise Egan

OTTAWA, Nov 17 (Reuters) - Classified Bank of Canada documents were stolen from Governor Mark Carney's car earlier this month but none of the missing papers contained information that could move markets, a bank spokesman said on Wednesday.

About one week after meeting with other G20 finance officials in Korea, Carney was in Montreal for private meetings when someone smashed in the window of the bank's locked, official vehicle and removed a bag.

"The car was broken into. Essentially the window was smashed and a bag containing some personal effects and some documents was stolen from the car," said central bank spokesman Jeremy Harrison.

Two other recent security breaches by government ministers have been politically embarrassing and career-limiting. Former Foreign Affairs Minister Maxime Bernier was forced to step down in 2008 after leaving classified briefing papers at his girlfriend's house.

There were no immediate signs that Carney, a former Goldman Sachs investment banker who is very highly regarded in government, would be reprimanded.

Finance Minister Jim Flaherty suggested Carney held no responsibility in the incident.

"He's a victim of a crime and that's an unfortunate thing," Flaherty told reporters.

Police confirmed they had recovered Carney's bag but neither they nor the bank would say whether the documents had been found.

The papers were not related to interest rate decisions -- the bank's next rate announcement is scheduled for Dec. 7 -- and were not of the highest security classification.

"The documents in the bag did not contain any market moving information nor did the bag contain any documents that had government of Canada security classification," Harrison said.

"But it did contain Bank of Canada internal administrative documents with various internal security classifications such as staffing notes, briefing notes etcetera."

Royal Canadian Mounted Police spokesman Luc Thibeault could not say whether there were any suspects in the case.

The incident raised questions about the bank's policies for safeguarding confidential information.

"Clearly there has been a potentially harmful breach," said Finn Poschmann, vice-president of research at the C.D. Howe Institute think tank, who called on the bank to review its procedures.

The bank has already taken steps to carry out a review of security policies and training, including those specifically regarding official vehicles, Harrison said.

The bank has not directly blamed anyone but its description of the mishap seemed to suggest neglect by Carney's official chauffeur, who may have left the car unattended.

But one opposition politician said Carney himself should come forward and take responsibility.

"You don't blame the driver ... I don't buy that. You're responsible for your stuff," said Thomas Mulcair, a legislator for the New Democratic Party and frequent critic of Carney's Goldman Sachs connection. (Editing by Jeffrey Hodgson)

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