The Bank of Canada has started the formal process to replace Governor Mark Carney, who is leaving in June to lead the Bank of England.
The committee of outside directors has placed newspaper advertisements and hired recruiting company Odgers Berndtson according to a statement today on the Ottawa-based central bank’s website. The candidate selected by the directors also needs the approval of the federal cabinet, including Finance Minister Jim Flaherty.
Carney’s success in guiding the world’s 11th largest economy through the global financial crisis suggests the bank will seek “continuity” in monetary policy, favoring Senior Deputy Governor Tiff Macklem, said Craig Alexander, chief economist at Toronto-Dominion Bank. (TD) Canada exited the global recession in 2009, faster than other Group of Seven nations, and none of its financial institutions required public capital injections .
“It’s widely recognized that Tiff Macklem is the most likely candidate from within the Bank of Canada, though I’m sure the search committee will evaluate a large number of candidates,” Alexander said in a telephone interview.
Macklem is scheduled to give a lecture Thursday at 4 p.m. Toronto time in Kingston, Ontario. There won’t be a press conference afterward.
The next governor should have “unquestioned technical competence in monetary policy and, more broadly, macro- economics, coupled with a highly developed understanding of the financial sector, both institutions and markets, domestically and internationally,” according to the job posting. The salary range for the governor’s job in 2012 was C$431,800 ($438,100) to C$507,900. The governor and five deputies implement monetary policy by consensus.
Carney said Nov. 26 he would leave his job on June 1 and start as Bank of England governor one month later, ahead of the end of his seven-year term in January 2015. That gives the directors less time to find a replacement than they had in April 2007, when then-Governor David Dodge said he wouldn’t seek a second mandate after his term ended in January 2008.
Central bank spokesman Jeremy Harrison declined to comment when asked for further details on the timing of finding a replacement.
The bank’s mandate is to aim inflation at the 2 percent mid-point of a 1 percent to 3 percent target range. Canada’s inflation rate fell to 0.8 percent in December, the slowest in more than three years.
“One of the key things they’re going to be looking for is continuity,” Alexander said. “The Bank of England was looking for a fresh perspective on monetary policy -- on the other hand I think the Bank of Canada has conducted monetary policy extraordinarily well.”
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