Flaherty Said to Get Carney Replacement List This Week
Bank of Canada directors will give Finance Minister Jim Flaherty a short list of candidates this week as the search to replace Governor Mark Carney enters its final stages, said two people familiar with the plans.
The central bank’s board of directors will present the list to Flaherty after a two-day meeting in Ottawa, said the people, who asked not to be identified because the discussions are private. Flaherty, who has said that the announcement could be made in April, will then interview the people on the short list, with the appointment to be approved by Prime Minister Stephen Harper and his cabinet.
The bank’s outside directors have been reviewing candidates after posting the job Jan. 7, following Carney’s surprise November announcement he would leave his job June 1 to take over the top post at the Bank of England. Analysts at JPMorgan Chase & Co. have said the most likely replacements are Senior Deputy Governor Tiff Macklem and Export Development Canada Chief Executive Officer Stephen Poloz.
“They have to do their due diligence when it comes to looking at a variety of candidates,” said Mark Chandler, head of fixed-income strategy at Royal Bank of Canada in Toronto. “They can’t just anoint anyone.”
Macklem remains the most likely choice as Canada isn’t looking for a major monetary-policy overhaul, Chandler said.
Dale Alexander, a Bank of Canada spokeswoman, declined to comment. A spokesman for Flaherty didn’t respond to a phone call and an e-mail seeking comment.
Whoever takes over from Carney must guide the world’s 11th largest economy through a sluggish expansion threatened by weak exports and record consumer debts. Carney and Macklem have kept the bank’s policy interest rate at 1 percent since September 2010, the longest pause since the 1950s, and the bank said in a March 6 statement that borrowing costs would probably “remain appropriate for a period of time.”
The government wanted to look at a broad pool of candidates, a person with knowledge of the process told Bloomberg News in January. Flaherty issued a statement Jan. 16 that said he would be directly involved in the selection. He said in an interview with Reuters that the announcement could come in April.
“The sooner the leadership is clarified, the better,” David Watt, chief economist in Toronto at HSBC Bank Canada, said in a March 28 telephone interview. “You don’t necessarily want questions being asked about the Bank of Canada’s inflation- fighting credibility,” said Watt, a former senior economist at the central bank.
The job has a seven-year renewable term and the salary range for last year was C$431,800 ($424,900) to C$507,900. The job advertisement called for “unquestioned technical competence” in monetary policy and “a highly developed understanding of the financial sector,” as well as “exceptional communications skills” and ability in both English and French.
The central bank is mandated to run monetary policy aiming at a 2 percent target for inflation. Canada’s consumer price index has risen below that target pace for the past 10 months.