* Schembri to be one of six on governing council
* An academic who came up through the ranks
* Will focus on financial system activities
* Has written papers showing benefit of flexible FX
By Randall Palmer
OTTAWA, Feb 21 Larry Schembri, a Bank of Canada
economist with international expertise, will become one of the
central bank's deputy governors on its rate-setting council
starting next week, the bank said on Thursday.
Schembri, 55, is an academic who currently coordinates the
bank's contributions to the Financial Stability Board of the
Group of 20 leading economies. He will replace Jean Boivin, who
moved to the finance ministry. Schembri's appointment is
effective next Monday.
The bank has still to replace Governor Mark Carney, who will
leave on June 1 to head up the Bank of England starting in July.
"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.
"Furthermore, 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."
In addition to the governor and senior deputy governor, the
governing council has four deputies.
The Bank of Canada is more of a closed shop than other
western central banks. Its top officials aim to speak with one
voice and it does not release minutes that would indicate if
they are hawkish or dovish, though an insider could be seen as
less likely to rock the boat.
"He's a long-time serving member of the Bank of Canada, an
internal appointment, so probably we can't expect to see too
much of a change in terms of how that will impact policy at the
central bank," said Mazen Issa, macro strategist at TD
"The bigger question that still remains unanswered is who
will take the reins, who his boss will be."
The central bank has advertised for Carney's position and a
special committee of the Bank of Canada's board of directors has
the task of compiling a list of potential candidates. Tiff
Macklem, currently the senior deputy governor, is considered the
Schembri joined the bank in 1997 as a visiting research
adviser in the International Department, where he later became
research director. In 2005 he was appointed chief of the
International Economic Analysis Department until his appointment
to the current position of adviser in September 2010.
He has a Master's degree in economics from the London School
of Economics and Political Science, and a doctorate in economics
from Massachusetts Institute of Technology.
Schembri has published many academic articles and working
papers, including a number on the benefits of flexible exchange
rates. But his writings appear to give few hints as to his views
on monetary policy.
He will help oversee the bank's financial system activities,
along with Deputy Governor Tim Lane, while Deputy Governors
Agathe Cote and John Murray will oversee the bank's analysis of
domestic and international economic developments in support of
monetary policy decisions.
This marks a shift for Cote from the financial system side
to the economic analysis side, where she replaces Boivin.