TORONTO (Reuters) - The Bank of Canada said on Wednesday it has appointed former International Monetary Fund advisor Timothy Lane as a deputy governor of the central bank, filling the spot vacated by Sheryl Kennedy in December.
The bank said Lane, who has been an adviser to Governor Mark Carney and has focused on Canadian and international monetary policy since he joined the central bank in August, assumes the role on Wednesday.
Lane held several positions with the IMF, including a stint where he was responsible for policy development and analysis of many countries in Europe and Latin America.
At a time of global economic crisis, Lane’s experience with the multinational organization, which is a lender of last resort, likely played a role in the central bank’s selection, analysts said.
“Given the international scope of the current financial market crisis it might be helpful for the Bank of Canada to have someone who has been in a senior position at the IMF, which is, of course, intimately involved in rescuing countries in those situations,” said Avery Shenfeld, senior economist at CIBC World Markets.
Lane is one of six members of the bank’s governing council responsible for interest rate decisions. The group consists of Governor Carney, the senior deputy governor and four deputy governors.
Lane’s research papers at the IMF included one on IMF lending and moral hazard and one on the effect of monetary policy during the financial crises in Brazil and Korea.
“Presumably, Governor Carney will leverage Lane’s knowledge of international economics to help assist the bank during the current crisis,” Ian Pollick, economics strategist at TD Securities, said in a note.
Carney said in a statement that the appointment was a recognition of Lane’s “intellectual leadership” during his career and that the bank welcomed his international perspective.
The appointment of Lane comes about a month after the Bank of Canada lowered its key overnight rate to a 50-year low of 1 percent and signaled that further rate cuts may be needed.
Earlier this week, the head of the IMF said the world financial crisis could come to an end from the beginning of 2010 if governments take necessary steps.
Editing by Peter Galloway