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Email this6:19 am
December 12, 2009
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Various media sources are reporting that the Minister of Finance, Bill Morneau, and current Bank of Canada governor, Stephen Poloz, are expected to hold a news conference confirming the new Bank of Canada governor.
Senior Deputy Governor Carolyn Wilkins has certainly been groomed for the role by Poloz, through lead roles on certain market functioning policy initiatives and in the regular BoC press conferences—almost to the point that some could argue the BoC governor has essentially usurped the Minister of Finance's hand. As such, the market certainly expects Wilkins as successor, requiring little to no transition time. Her gender also lends to the federal government's policy priorities.
On the other hand, while we don't know the other shortlisted candidate, Bloomberg News is reporting it was either Tiff Macklem, who was the runner up to Poloz and Mark Carney's Senior Deputy Governor. Deputy Governor Paul Beaudry may have also been the other shortlisted candidate. As well, Bloomberg News previously speculated if someone other than Wilkins was to be named, the announcement would likely come a full month or so before Poloz was to step down in early June. Bloomberg News is also reporting Wilkins doesn't have a Ph.D in Economics, only a Master's degree, and that that may be a slight knock against her as a candidate.
I'm also wondering if she was to be the BoC governor, why isn't she in attendance at the press conference? Typically, when Carney and Poloz were appointed, they were in attendance. 
Update: University of Toronto Rotman School of Management and recently re-elected The Bank of Nova Scotia board director Tiff Macklem has been confirmed as the next Bank of Canada governor, succeeding Stephen Poloz. Senior Deputy Governor Carolyn Wilkins' term as Senior Deputy Governor concludes some time next year, and she has yet to indicate whether she will either (a) remain in her position to the end of her term or (b) seek re-appointment by government. Tiff Macklem, having learned of his appointment yesterday, has separately confirmed he intends to serve notice to the University of Toronto and to Scotiabank that he will resign his respective positions before he takes office as Bank of Canada governor.
Cheers,
Doug
9:08 am
February 20, 2018
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Glad they didnt go with a politically correct choice
11:41 am
December 12, 2009
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Bud said
Glad they didnt go with a politically correct choice
Me too, actually, Bud. I think Ms. Wilkins is a fine manager of the day-to-day operations and programs of the bank, but I don't think she's ready—yet—for the lead role in shepherding Canada's monetary policy.
From what I've read, a lot of people are saying that Mr. Macklem won't be afraid to use unconventional monetary policy tools as we shift to the economic recovery phase. He didn't rule out negative interest rates, but downplayed their usefulness at this point, with which I'd agree. I'm not sure when negative interest rates would be helpful, really, but I do hope that, to provide stimulus, this means that the Bank of Canada will not only buy up existing government of Canada and provincial government debt, but reset the debt it has purchased at 0-0.25% rates to reduce or eliminate the borrowing costs for governments. This should be only modestly inflationary, given the ultra low levels of economic activity. It could even go to the extent of buying up some of the debt and wiping it off or even paying citizens a monthly citizens dividend to encourage economic stimulus.
Cheers,
Doug
4:11 pm
September 11, 2013
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Doug, you say the Bank of Canada "buys up" government debt. I'm not a follower of this stuff but I'd be interested to know, can you explain how that works? Say I hold a $100K gov't bond and it's "bought up" by the B of C, what actually happens? And where did the B of C get the money to buy my bond?
5:48 am
November 8, 2018
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The incoming Governor of the Bank of Canada, Tiff Macklem, suggested that the possibility of negative interest rates is on the table.
I should have moved my money to 3% 5 years GIC when I had a chance...
7:03 am
November 19, 2014
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Bud said
Glad they didnt go with a politically correct choice
Don't worry.. he is plenty politically correct in his own right.
""“Climate change is a major force that's going to be impacting the economy, like globalization, like technological change,” Macklem said Friday. “We will be looking at climate change along with a host of other major economic forces acting on the economy to the extent that they affect inflation.”""
""""The financial sector is not going to solve climate change, but the things that are—innovation, clean electricity, deep building retrofits, climate-resilient infrastructure and more—all require investment, and that's where finance is critical. For Canada to be competitive in a world that is increasingly concerned about sound environmental stewardship, sustainable finance needs to become business as usual in the Canadian financial services industry."
- Tiff Macklem, Chair of the Expert Panel on Sustainable Finance"""
7:57 am
September 7, 2018
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Koogie said
Don't worry.. he is plenty politically correct in his own right.
""“Climate change is a major force that's going to be impacting the economy, like globalization, like technological change,” Macklem said Friday. “We will be looking at climate change along with a host of other major economic forces acting on the economy to the extent that they affect inflation.”""
""""The financial sector is not going to solve climate change, but the things that are—innovation, clean electricity, deep building retrofits, climate-resilient infrastructure and more—all require investment, and that's where finance is critical. For Canada to be competitive in a world that is increasingly concerned about sound environmental stewardship, sustainable finance needs to become business as usual in the Canadian financial services industry."
- Tiff Macklem, Chair of the Expert Panel on Sustainable Finance"""
With a Federal Deficit estimated to be AT LEAST $252 Billion, it will be interesting to see how much of the Liberal agenda will/can possibly be achieved. Trudeau is a big talker but noteworthy achievements in his 5 years so far are few and far between.
The Oil and Gas industry in Canada is now on life support and there will be a large number of businesses not reopening (I see many papered-up storefronts already) ----so I think we likely will have several years, perhaps a decade or more of stagnation, high unemployment, very low interest rates. Higher taxes, govt fees, are for sure!
7:22 pm
October 15, 2015
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I'm concerned Tiff has been out of touch with the economy and Carolyn would have been more up to date with trends and what's happening. I'm not sure how long he's been Dean but he's been out of Bank of Canada quite a while.
10:16 pm
April 6, 2013
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I think the rest of the Bank of Canada team would be able to bring the new governor up to date.
Stephen Poloz was asked about staying on, during the April 15 press conference, around the 45:20 mark. He responded that the Bank of Canada operates as a team and that there is substantial depth in the other members of the team.
6:49 am
December 12, 2009
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christinad said
I'm concerned Tiff has been out of touch with the economy and Carolyn would have been more up to date with trends and what's happening. I'm not sure how long he's been Dean but he's been out of Bank of Canada quite a while.
Thanks for your opinion, Christina. I get the sentiment completely, but I don't think that would be the case. As the Dean of the Rotman School of Management at the University of Toronto, it's likely he was also still teaching at least one or two economics classes where he would be teaching on current Canadian macroeconomic issues. As a career public servant with the Bank of Canada and a passionate economist, he most likely kept up-to-date, more than of us I suspect, on the latest economic data, trends, and information.
As well, the federal government has a history of recruiting the Governor of the Bank of Canada from outside the bank. Noting this Bank of Canada webpage, Stephen Poloz' predecessor, Mark Carney, was recruited from the Department of Finance where he was Senior Associate Deputy Minister. His predecessor, David Dodge, was the Deputy Minister of Health. It looks like we have to go back to Gordon Thiessen's appointment in 1994 to find a time when the federal government appointed a Senior Deputy Governor to the position of Governor. Even the current governor, Stephen Poloz, was recruited from a more unconventional recruitment funnel—Export Development Canada—where he was President & CEO.
Norman1 said
I think the rest of the Bank of Canada team would be able to bring the new governor up to date.Stephen Poloz was asked about staying on, during the April 15 press conference, around the 45:20 mark. He responded that the Bank of Canada operates as a team and that there is substantial depth in the other members of the team.
Yes, and to add to what Norman says, Carolyn Wilkins, as the Senior Deputy Governor and COO will provide good bench strength as she is a strong manager of the day-to-day operations and functioning of the bank. I suspect we will probably see he either seek reappointment to the position next year or she may decide to seek to broaden her experience, perhaps by applying for OSFI superintendent Jeremy Rudin's position, whose term is up next year. She may also desire to move to the Department of Finance. Or, she may desire to pursue an international opportunity as the second-in-command at OSFI, Carolyn Rogers, did last year when she was appointed the Secretary General of the Basel Committee on Banking Supervision (international standards body for banking regulation best practices) of the Bank of International Settlements (the so-called international central bank of central banks). Perhaps next time, we will have two female candidates as the shortlisted candidates for the next Bank of Canada governor, both of them named Carolyn. 😉
Cheers,
Doug
12:36 pm
October 15, 2015
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I am rooting for him. He's got a tough road ahead! I read an article i forgot to bookmark which suggests he was Bill Morneau's pick. Who really knows what is going on behind-the-scenes. I didn't like hearing people say the only reason Carolyn would have been hired is because she was female as she is clearly capable at her job and is qualified. Had she been hired she would have had to prove people wrong that she was only hired because shes female. Things are improving but there is still a lot of sexism, particularly in finance. Hopefully things will change more in the future. I also want to recognize being Dean in academia isn't easy as there are a lot of politics and he may be better equipped that way.
6:59 am
April 6, 2013
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Bill said
… Say I hold a $100K gov't bond and it's "bought up" by the B of C, what actually happens? And where did the B of C get the money to buy my bond?
Nothing really happens to the bond. Bank of Canada will either (a) hold the bond until someone comes along later and wishes to buy it or (b) receive their money back with interest when the bond matures.
In her recent comments to the C. D. Howe Institute, Senior Deputy Governor Wilkins shared this:
Keeping our eye on the ball
…
- Second, a good part of the increase in the balance sheet will run off naturally as liquidity measures and purchases of short-term assets are wound down, much like we saw after the global financial crisis. Right now, close to 90 percent of the increase in our balance sheet is set to mature within a year. Although this proportion will decline as our bond purchases progress, most longer-term securities acquired will be available for sale.
…
The impression I had is that the purchase programs are intended to maintain previous normal liquidity of certain debt markets. The goal is not quantitative easing, to increase money supply or pressure interest rates lower.
11:34 am
September 11, 2013
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Norman1, where did the Bank of Canada get the money to pay me $100K for my bond? Does it have cash lying around to buy up large quantities of bonds whenever needed?
In a thread begun about various choices re new head of BOC, including comments about gender and political correctness being important to some people (including an allegation of "sexism"), looks like I was censored just for referring to PM Trudeau's explanation when asked why he chose an English-speaking white male. Here is the clip of Mr Trudeau's explanation:
https://www.msn.com/en-ca/news/elections/trudeau-asked-why-he-selected-a-white-male-to-be-bank-of-canada-governor/vi-BB13A3vC
12:13 pm
April 6, 2013
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Bill said
Norman1, where did the Bank of Canada get the money to pay me $100K for my bond? Does it have cash lying around to buy up large quantities of bonds whenever needed?
…
Yes, the Bank of Canada does have cash lying around. The bank can also "create" new Canadian dollars, if needed.
2:46 pm
September 11, 2013
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Thanks, Norman1, I wasn't sure if that's where money-printing originated but apparently it is. Must be nice to be able to borrow money, spend it, and then create more money needed to pay it back - wish I could do that!
8:48 pm
April 6, 2013
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Any money printing needed would be short term.
In the case of any three-month commercial paper bought, the money will return to the Bank of Canada, along with interest, when the paper matures.
Similar with the longer term bonds. Some pension fund or ETF may need to invest in such bonds a few months later. Bank of Canada would then sell the bonds get its money back along with some interest.
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