Bank of Canada Senior Deputy Governor Tiff Macklem is leaving the central bank May 1, a move announced seven months after he was passed over for the top job.
Macklem will become dean at the University of Toronto’s Rotman School of Management for a five-year term starting July 1, the Ottawa-based central bank said in a statement on its website today.
The 52-year-old Montreal native lost a bid to become governor to Stephen Poloz. His departure creates a vacancy on the bank’s six-member governing council, which sets monetary policy for the world’s 11th largest economy and which has kept its key policy rate at 1 percent for more than three years.
“It’s certainly a loss to the Bank of Canada,” said Paul Ferley, assistant chief economist at Royal Bank of Canada in Toronto. “He is very experienced in terms of monetary policy domestically as well as years at finance that resulted in him acquiring a lot of expertise in the international financial markets.”
The Canadian dollar was little changed after the announcement, rising 0.4 percent to C$1.0643 per U.S. dollar at 4:07 p.m. in Toronto. The currency reached the lowest since May 2010 at C$1.0707 yesterday after policy makers including Macklem said the downside risks to inflation appeared to have grown.
“I will miss the Bank a great deal,” Macklem said in the statement. “Governor Poloz, my colleagues on Governing Council, and the Bank’s staff are the most dedicated and talented professionals with whom I’ve had the pleasure to work. Canada’s economy is in good hands.”
Macklem isn’t available for an interview today, said bank spokeswoman Jill Vardy.
The departure doesn’t signal a shift in the central bank’s monetary policy is coming, Ferley said. The governing council works by consensus and, unlike the U.S. Federal Reserve, doesn’t publish meeting minutes or vote tallies, meaning there’s no direct evidence of Macklem’s views.
The central bank’s board of outside directors will form a special committee to find a replacement, and no time frame was given in the statement for that task. The senior deputy is appointed by the directors with the approval of the federal cabinet.
“Tiff has dedicated nearly 30 years to the Bank and to Canada, and his influence can be seen in every aspect of our work and in central banking worldwide,” Poloz said in the statement. “I want to thank him for making the Bank better, and especially for his support and mentorship during my first six months as Governor.”
The central bank hired Macklem as an economist in 1984 after he completed a Bachelor’s degree from Kingston, Ontario-based Queen’s University and a Master’s in economics from Western University in London, Ontario. He returned to Western to pursue a doctorate, which he received in 1989, before rejoining the bank.
Macklem worked his way up in the research department through the 1990s before becoming its chief in 2000. He first joined the rate-setting panel in December 2004 after a yearlong stint at the Department of Finance. He became senior deputy in July 2010, appointed to a seven-year term, after another tour at finance, this time as associate deputy minister, from 2007.
“We are delighted that Tiff Macklem is joining the University of Toronto,” Cheryl Regehr, the university’s vice president and provost, said in a statement. “He has vast experience managing large institutions, translating academic research into public policy and representing Canada on the world stage.”
Macklem had a key role at the Finance Department at the height of the global financial crisis. He advised Prime Minister Stephen Harper at a summit of Group of 20 leaders in Toronto and on Canada’s decision to join the U.S. in offering General Motors Co. and Chrysler LLC restructuring money.
Macklem, who plays recreational ice hockey in Ottawa, also led a policy committee at the Financial Stability Board, the Basel, Switzerland-based body that’s responsible for strengthening global financial rules on behalf of the G-20.
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