The Bank of Canada said Larry Schembri will become deputy governor as of Feb. 25, an internal promotion to its rate-setting panel while the government conducts a broader search to replace departing Governor Mark Carney.
Schembri, 55, has been adviser to Carney since 2010. He replaces Jean Boivin, who left in October to become associate deputy finance minister under Jim Flaherty.
“Larry’s expertise of monetary theory and policy in open economies, and profound understanding of the international monetary system make him an exceptional addition to Governing Council,” Carney said in a statement posted on the central bank’s website. “His dedicated efforts in recent years in support of the Bank’s financial stability function have contributed greatly, not only to the Bank, but also to the important work of the Financial Stability Board.”
The new deputy joins a governing council that has left borrowing costs unchanged for more than two years as it grapples with a recovery hampered by a weak global recovery. Still, the Bank of Canada remains the only central bank among Group of Seven nations with a bias toward tightening.
Deputies are chosen by the bank’s board of outside directors. The job posting for applications said the winner should have management experience and “superior analytical and communications skills,” including competence in English and French, Canada’s official languages.
“He is an eminently qualified candidate who brings the right mixture of academic and practical experience to an important role at the bank,” said David Tulk, chief Canada macro strategist at Toronto-Dominion Bank’s TD Securities unit, who worked at the central bank during Schembri’s tenure.
The bank’s directors will now focus on selecting a governor to replace Carney, a choice that must be ratified by the federal cabinet. The directors and government are looking at a broad pool of candidates beyond internal choices such as senior deputy Tiff Macklem, a person with knowledge of the process told Bloomberg News last month.
The history of finding deputies from inside the bank is mixed. Current members Agathe Cote and John Murray were promoted from within. Timothy Lane was named deputy governor six months after coming from the International Monetary Fund.
Schembri joined the bank in 1997 as a visiting research adviser in the international department, and served as chief of the international economic analysis department, managing a team of economists that monitors developments outside Canada.
He coordinates the Bank of Canada’s contribution to the Financial Stability Board, the Basel, Switzerland-based body that’s writing rules to avoid another global financial crisis. Carney is the FSB’s chairman.
The Toronto native has a bachelor’s degree in commerce from the University of Toronto, a master’s in economics from the London School of Economics, and a doctorate in economics from the Massachusetts Institute of Technology. Nobel Laureate Paul Krugman was one of his Ph.D supervisors at MIT.
Schembri’s published research has focused on exchange rates and monetary policy in open economies and the international monetary system, according to the central bank. Some of his recent work called for global monitoring of the so-called shadow banking system and reforms to the international monetary system to promote flexible exchange rates.
Schembri has also worked as an economics professor at Carleton University in Ottawa and in the analytical studies group at Statistics Canada, the country’s statistics agency.
Schembri and Lane will share responsibility for overseeing the central bank’s work related to the financial system, while Cote and Murray will oversee the bank’s analysis of the domestic and global economies, Carney and Macklem said in today’s statement.