Poloz Stresses Bank of Canada Continuity on Rate PanelTheophilos Argitis and Greg Quinn
Bank of Canada Governor Stephen Poloz is stressing continuity at the central bank even as it undergoes the biggest turnover of senior management in its 79-year history.
Poloz, who took over the bank last June, announced April 11 that Carolyn Wilkins will become senior deputy governor and the first woman to hold the post, replacing Tiff Macklem who departs next month. Wilkins is the highest-profile appointment at the Ottawa-based bank since Poloz succeeded Mark Carney. A third member of the six-member interest-rate setting panel, deputy governor John Murray, also retires this month, and a replacement hasn’t been named yet.
The departures of Macklem and Carney, who left Canada last year to become governor of the Bank of England, mark the first time the central bank has replaced its two top executives within a 12-month period. With the exit of Macklem and Murray, the Bank of Canada is losing two executives with a combined six decades at the central bank.
Poloz told reporters during the spring meetings of the International Monetary Fund in Washington that the turnover “is not really an issue” for the central bank because it has “this incredible bench of expertise.” Calling the overhaul of the governing council an “accident of history,” Poloz said the central bank has a culture of continuity and a deep team of policy makers.
Wilkins is the “complete package” with strengths that include credibility in financial markets, experience in economic forecasting and communications skills, Poloz said. “The range of characteristics you’re looking for just pop out in this candidate,” he said.
Wilkins, 50, joined the bank in 2001 and has been adviser to Poloz since August. Before that, she was chief of the financial stability department. While her appointment to the No. 2 job marks the first time since Malcolm Knight in 1999 that the post has gone to someone who hasn’t sat on the Bank of Canada’s rate-setting panel, her most recent job has been to oversee production of the flagship Monetary Policy Report.
The native of Peterborough, Ontario, has a master’s degree in economics from Western University in London, Ontario. “She has a broad range of experience in the bank and also outside,” said Craig Wright, chief economist at Royal Bank of Canada. “I wouldn’t rule out Carolyn eventually down the road moving into the Governor’s chair.”
She has represented Canada at international financial meetings, chairing the Basel Committee on Banking Supervision’s working group on liquidity. Wilkins also led a G-20 working group that helped implement changes to markets in over-the-counter derivatives.
Her appointment is effective May 2, the day after Macklem leaves to become head of the University of Toronto’s business school, the Ottawa-based bank said in a statement on its website.
“This has been an extremely thorough process as we sought the best candidate to fill this critical role,” Finance Minister Joe Oliver said in a separate statement last week.
To be sure, it is not the first time the central bank has seen one half of its governing council leave in quick succession. In 2010, Senior Deputy Governor Paul Jenkins and deputy governors David Longworth and Pierre Duguay all retired.
The six-member Governing Council works by consensus and doesn’t publish meeting minutes or record votes, meaning there’s no direct evidence of different members’ influence on policy decisions.
After the bank’s April 16 interest rate decision, Wilkins will join discussions by policy makers who have said they may raise or lower a 1 percent policy interest rate depending on how economic data progresses. The rate has been unchanged since September 2010, the longest pause since the 1950s, as inflation has stayed below the bank’s 2 percent target and consumers have taken on record debts as a share of income.
Wilkins’ appointment is the latest step in an overhaul of the policy makers who guided Canada through the global financial crisis. Besides Carney and Macklem, former Finance Minister Jim Flaherty stepped down last month one month before he died, to be replaced by Oliver. The country’s top banking regulator, Julie Dickson, is scheduled to leave her post in July before joining a panel overseeing European lenders. Michael Horgan, deputy minister of Canada’s finance department since 2009, is also retiring this month.
The senior deputy’s role has shifted - nobody in that role has gone on to become Governor since Gordon Thiessen in 1994. Earlier this year, the bank established the role of chief operating officer and named Filipe Dinis to the post, removing the duties from the senior deputy governor’s job to leave it more focused on policy.
The senior deputy governor is appointed by the central bank’s board of outside directors, with the approval of the federal cabinet, for a renewable term of seven years. The job had a salary range of C$302,300 to C$355,600 in 2012.