TORONTO – Canada’s central bank on Thursday named its new governor to replace outgoing regulator Mark Carney, who is leaving to head the Bank of England.
Finance Minister Jim Flaherty said Stephen Poloz will take the top job at the Bank of Canada. Poloz, the former president and CEO of Economic Development Canada, has spent 14 years with the Bank of Canada in various capacities.
“Stephen Poloz has a long and distinguished career in the public and private sectors with 30 years’ experience in financial markets, forecasting and economic policy,” Flaherty said in a statement.
“I am confident he has the skills and experience required to lead the Bank of Canada at a time of global economic uncertainty.”
Poloz was the president and chief executive at the Economic Development Canada ministry since 2011. He joined the organization in 1999 as vice-president and chief economist, and in 2004 was named senior vice-president of corporate affairs.
Poloz also spent five years with Montreal-based economic research firm BCA Research. He holds degrees in economics from the University of Western Ontario and Queen’s University.
Carney leaves the Bank of Canada for his new job as head of the Bank of England beginning in July. He is the first foreigner to serve as governor of the Bank of England since it was founded in 1694.
Carney, who took over the Bank of Canada in 2008 and is leaving 18 months before his seven-year term ends, congratulated Poloz on his appointment.
“I’ve always enjoyed his sharp insights on the Canadian and global economies, and I’ve admired his sound judgment and inspired leadership at EDC,” Carney said.
Many had speculated that Tiff Macklem, 51, the second-in-command official at Canada’s central bank, would be appointed governor. Some central-bank watchers described Thursday’s news as a stunner.
“Who said that central banking was boring? The choice of Stephen Poloz as the new governor of the Bank of Canada is a huge surprise,” Canadian Imperial Bank of Commerce said in a note to clients.
“Why did the Finance Minister decide to take this direction as opposed to the widely expected choice of going with the current senior deputy governor? The answer may be that the minister would like to see a governor with more experience with dealing directly with the private sector.”
Flaherty said during a press conference Thursday that Macklem is looking forward to working with Poloz.
Poloz has a tough act to follow taking the helm from Carney, a highly educated economist with Wall Street experience who is widely credited with helping Canada dodge the worst of the 2008 global economic crisis. He gained a reputation along the way as a tough regulator who stood up to JPMorgan Chase CEO Jamie Dimon.
Moving to the top job at Canada’s central bank just before the global financial crisis hit, Carney slashed interest rates to historic lows and was the first central banker to commit to keep them at a historic-low level for a definite time, a step the U.S. Federal Reserve would follow.
Carney has held the bank’s influential overnight interest rate at the historic low of 1 per cent since 2010 in an attempt to spark business activity and help the country recover from the lingering effects of the global recession of 2008-09.
Poloz comes to the job in a post-crisis era of slow economic growth and high unemployment.
The Canadian economy expanded just by 0.3 per cent in both January and February, and the unemployment rate sits at 7.2 per cent, with almost 1.4 million people out of work.
“I have a lot of confidence in Stephen Poloz to do the job as governor of the Bank of Canada during these economic times,” said Toronto Dominion Bank senior vice-president and chief economist Craig Alexander. “He’s an extraordinarily strong economist and an exceptionally good manager and leader. He’s had a long career in Ottawa. As the chief economist at Economic Development Canada, a strong financial institution, it has very strong connections to the financial community so he’s a known quantity on Bay Street.”