Murray’s Departure Leaves Canada’s Poloz Two Vacancies

The announcement by John Murray that he’ll retire from the Bank of Canada next year leaves Governor Stephen Poloz facing the prospect of having two new faces on the bank’s six-member rate-setting panel less than one year into his tenure.

Murray, 65, announced today he’ll retire at the end of April, after Senior Deputy Governor Tiff Macklem said earlier this month he’s leaving at the beginning of May to become dean of the University of Toronto’s Rotman School of Management.

While Murray’s retirement “is unlikely to trigger a sharp, shift in monetary policy,” the two vacancies “will allow Governor Poloz to put his own stamp on Governing Council,’ said Andrew Kelvin, senior fixed income strategist at TD Securities in Toronto, who worked at the Ottawa-based central bank between 2007 and 2011.

The bank’s independent directors will make the senior deputy appointment with the approval of the federal government. Filling the deputy governor position doesn’t need cabinet approval. The appointment process will get under way ‘‘in early 2014,” the bank said.

Under the Bank of Canada Act, the governor is responsible for monetary policy. In practice, decisions are taken by the governing council, which operates by consensus.

Murray, who was appointed deputy governor in 2008, has been responsible for international issues at the central bank along with deputy governor Larry Schembri. Murray was the bank’s representative at meetings of policy makers from the Group of 20 nations and International Monetary Fund.

‘Significant Role’

Murray also “played a significant role in establishing the theoretical foundations of inflation targeting and helping to refine the way in which it is implemented,” the bank said in its statement.

The announcement “does really open up the possibility of what can happen with the bank,” said David Watt, chief economist at the Canadian unit of HSBC Holdings Plc, by phone from Toronto. Current Deputy Governor “Agathe Cote would be a great senior deputy” to replace Macklem, Watt said. “She could be the first woman appointed to that position.”

Murray’s departure “opens some questions,” Watt said. Would Poloz “want somebody with international? Would he want somebody who’s got an inflation-targeting pedigree? Would he want somebody with the financial stability, to show that he’s focused on inflation and financial stability?”

Since Poloz took over in June, he’s been less visible than his predecessor Mark Carney, giving fewer speeches and interviews. At the same time, the deputy governors have taken on a higher profile, with each giving at least one speech.

“Historically what I have established for myself is rather a style of leading from behind,” Poloz told lawmakers Nov. 20, adding he thinks the approach “fits well with the kind of team atmosphere that we have at the bank.”

The Bank of Canada sets monetary policy aiming inflation at the middle of a 1 percent to 3 percent target band. The bank was began operations in 1934.

To contact the reporter on this story: Andrew Mayeda in Ottawa at

To contact the editor responsible for this story: Chris Wellisz at

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