Bank of Canada searches far and wide for Carney's successor

OTTAWA (Reuters) - The search for a new Bank of Canada chief to replace Mark Carney has pitted internal front-runner Tiff Macklem against a range of external candidates as officials look outside the bank for people who may have more hands-on business experience.

Mark J. Carney, governor of the central bank of Canada, sits in the audience before a financial and economic event at the London School of Economics in London March 25, 2013. REUTERS/Jason Alden/POOL

Most central bank watchers believe Macklem, currently second-in-command at the bank, has outstanding credentials and deserves to take over when his boss leaves.

But hints by Finance Minister Jim Flaherty that he is searching outside the Bank of Canada, and the institution’s history of surprise appointments, have opened up a very speculative field of possible contenders.

Others note that both Carney and his predecessor, David Dodge, had leapfrogged over more obvious governors-in-waiting.

Flaherty has said he is looking for someone like Carney, a former Goldman Sachs GS.N banker and aggressive regulator who raised Canada's global profile after the financial crisis and now heads the international Financial Stability Board, which is working on ways to prevent banking sector crises like those that triggered the financial crisis of 2008.

A special committee of the bank has completed its interviews of candidates, who must be Canadian citizens, and is producing a short list for Flaherty to interview. An announcement is likely in late April, after the federal cabinet approves the final candidate.

Carney is leaving on June 1 to take over as governor of the Bank of England on July 1. His exit will leave the Bank of Canada’s governing council without any direct private-sector experience.

Ottawa may want to fill that void, or it may simply want to show that it has done its due diligence, argued one senior bank economist who said the recruiting agency handling the hiring process, Odgers Berndston LLC, contacted him a few weeks ago in search of more names.

“They want to be able to tell the public they’ve evaluated all the potential candidates,” he said, declining to give his name because of the sensitivity of the issue.

Here is a list of possible candidates, based on interviews with financial markets players, academics and officials. Unless otherwise stated, none of those named would comment on whether they had applied for the job:


Macklem, 51, has spent the past 25 years at the Bank of Canada and the Canadian Finance Ministry. He has been the central bank’s senior deputy governor since July 2010. He has a reputation for academic research and became head of the bank’s research department in 2000 at the age of 39.

Macklem was the G20 deputy at the Canadian Finance Ministry throughout the 2008 financial crisis, and he played a key role in domestic and global crisis management.

In Canada, he helped fix a credit crunch in the commercial paper market and played key roles in the auto sector bailout and purchases of insured mortgages from banks. Internationally, Macklem was chairman of a committee of the Financial Stability Board - the G20’s financial reform task force - whose job it is to monitor implementation of agreed reforms.

Macklem is quieter and soft-spoken compared with the charismatic and notoriously aggressive Carney, and insiders say he has a less confrontational style.


Poloz, 57, has been president of the government’s export development agency since 2010 and was chief economist there for the previous 11 years. Canadian market players see him as the strongest external candidate because of his experience with monetary policy, forecasting and financial markets.

He spent 14 years at the Bank of Canada earlier in his career as chief of the research department - the same position as that held by Macklem - and has an understanding of how to navigate Ottawa politics and bureaucracy. He was a visiting scholar at the International Monetary Fund.

Several people interviewed by Reuters said Poloz has the credentials to succeed as Bank of Canada governor, and he wants the job. He was viewed as a governor-in-training during his years at the bank.

He is a good communicator, described by one person as “folksy” in his speeches but also whip-smart. He worked at a private-sector financial research firm in Montreal for five years.

Possible strikes against him are that he has been away from monetary policy for many years, and there was friction between him and colleagues during his stint at the central bank.


Spence, 52, is a managing director at the Toronto-based OMERS pension fund, which manages the pension money of municipal employees of the province of Ontario. He is a widely respected buy-side financial expert and a former global head of research for rates and foreign exchange at TD Securities.

Spence was also a special adviser to former Bank of Canada Governor Dodge in 2002 and 2003. He started his career at the UK Treasury.

Financial industry sources say Spence is interested in working at the central bank and that Carney once considered recruiting him for a deputy governor position. But he is seen as lacking monetary policy experience.


Evans, 55, would bring hands-on financial markets expertise to the bank as one of the most senior Canadians in the international banking world.

He has been vice chairman of Goldman Sachs since 2008 and global head of growth markets there since 2011. He helped build Goldman’s business in Asia from 2004 to 2012.

Sources say Evans is aiming for the chief executive job at Goldman Sachs, so he may not be interested in going to Ottawa from New York, where he is based.

A protégé of former U.S. Treasury Secretary Hank Paulson, Evans is seen as cut from the traditional banker’s cloth, the opposite of the profit-driven traders who got the bank in trouble over risky transactions. He co-chaired a committee that analyzed Goldman’s behavior during the financial crisis, earning him some enemies among the firm’s top managers.

The Goldman pedigree could work against him, given the large number of Goldman alumni in top financial positions, but the idea is less contentious in Canada than in the United States because investment banking has a lower profile and the sector is less tainted by scandal and bailouts.

Evans was a member of a Canadian rowing team that won a gold medal at the 1984 Olympics.


Lynch, 62, has been vice-chairman at the Bank of Montreal BMO.TO, Canada's fourth-largest bank, since 2010. He started his career as a Bank of Canada economist, from 1976 to 1981, and then worked in the federal government, including senior positions at the finance and industry ministries.

More recently he was clerk of the Privy Council, where he was in charge of overseeing the federal bureaucracy.

Lynch was quoted in the Globe and Mail newspaper last November as saying he was not interested, but his name continues to be mentioned as a possible candidate.


Boivin, 40, was a French-speaking academic from Montreal before he joined the Bank of Canada in 2009, first as a special adviser to Carney and then as deputy governor from 2010 to October 2012.

He is now at the Finance Ministry in the role of G20 deputy, the same career path followed by Carney and Macklem.

Boivin is an expert in interest rates and inflation and in 2000 co-authored a paper with Ben Bernanke, the U.S. Federal Reserve chairman, who later recommended to Carney that he bring Boivin onto the governing council.

People who have worked with him say he is ambitious and confident but believe he needs more experience before being a serious candidate for governor.


Ragan, 50, is a respected McGill University professor who spent a year as special adviser to the governor of the Bank of Canada and a year and a half advising Finance Minister Flaherty.


Robson, 53, is president and chief executive officer of the C.D. Howe Institute and chairs its monetary policy council, which makes interest-rate recommendations ahead of key Bank of Canada decisions.

Additional reporting by Randall Palmer in Ottawa and Lauren Tara LaCapra in New York; Editing by Janet Guttsman, Tiffany Wu and Douglas Royalty