OTTAWA (Reuters) - The man tipped to be the next governor of Canada’s central bank has the reputation of being a mild-mannered sideman to charismatic bank chief Mark Carney, but former colleagues say Tiff Macklem is a mover and shaker in his own quiet way.
As Carney prepares to leave the Bank of Canada to start his new job as head of the Bank of England on July 1, Macklem, his No. 2, has emerged as the frontrunner to succeed him.
The bank’s choice of governor must be approved by Conservative Prime Minister Stephen Harper’s government, which will likely look to external candidates as well, but insiders say Macklem, 51, has the knowledge and experience to do the job.
Macklem, who is making a speech in Kingston, Ontario, later on Thursday, is widely respected in academic circles, has had a stellar 25-year career at the bank and finance ministry and speaks fluent English and French, Canada’s two official languages.
The most glaring difference he presents to Carney - and perhaps Macklem’s biggest weakness - is his soft-spoken, cautious style, which raises doubts whether he has the street smarts to stand up to big bank CEOs and lawmakers and defend central bank actions.
Carney, known for his self-confidence and hot temper, had a now famous run-in with JPMorgan Chase Chief Executive Jamie Dimon last year over tougher new banking regulations.
“He’s a milder guy, very different,” said Purdy Crawford, a well-known Canadian businessman and lawyer who worked with Macklem in 2008 to restructure the Canada’s collapsed $30 billion market for asset-backed commercial paper.
“Tiff is maybe not as overtly ambitious as Mark is but he’s nobody’s push-around... He’s tough but easy, he doesn’t come through like a sledgehammer,” he said in a telephone interview.
The advertisement for the governor’s position said the winning candidate must have “the courage to take a stand”, a demand not mentioned when Carney applied for the job.
It’s not a trait usually associated with central bankers, but it’s something that Carney holds in spades. Carney was first G7 central banker to raise rates after the global financial crisis and his insistence that higher rates will one day be needed is met with some skepticism by market players focusing on stubbornly low inflation rates and the sluggish economy.
Macklem, for his part, is a classic public servant who toils quietly behind the scenes. He usually appears as backup to Carney, who has become a bit of a central banker rock star, in news conferences and parliamentary hearings.
“He looks like a bookish academic sort of guy and he hasn’t had the private sector experience that Mark Carney had,” said Bill Scarth, an economics professor at McMaster University in Hamilton, Ontario.
In his second stint at the finance ministry from 2007 to 2010, Macklem helped craft policies to keep the Canadian and world banking systems well-greased and to bail out the auto sector, said Paul Boothe, who preceded Macklem at finance and later led the auto bailout from the industry ministry.
Macklem was Canada’s point man at the G7 and G20 during the depth of the financial crisis and headed several international working groups. He also chaired a committee at the G20’s Financial Stability Board that monitors implementation of banking reforms.
“I think what you would find is, maybe not to the general public, but to the people in the industry - both private sector and in other governments - he’s very well known and very well regarded for being decisive,” Boothe said.
Slim and bespectacled, Macklem hails from Montreal, the biggest city in the French-speaking province of Quebec. He is married with three children and is an avid skier.
Many who worked with Macklem in his early days at the Bank of Canada in the 1990s saw him as “governor” material as he quickly rose through the ranks to become head of the research department in 2000 at the young age of 39.
McMaster University’s Scarth said Macklem impressed economists at the bank’s annual conferences, particularly for his research on debt and deficit reduction. “I think he was doing the best work I knew of in Canada in that area for several years.”
An internal candidate like Macklem would provide “continuity” at a time of global uncertainty, analysts said.
Carney and his predecessor, David Dodge, were both outsiders, moving to the Bank of Canada from other government departments, while Carney also had experience at Goldman Sachs.
Several external names have emerged as potential rivals to Macklem, but none have confirmed interest and the compressed timetable for choosing a successor may give Macklem an edge.
And it wouldn’t be the first time Canada has had a mild-mannered central banker. Gordon Thiessen, who held the job from 1994 to 2001 wasn’t exactly outspoken or combative, Scarth said.
“We’ve got previous cases where the quiet guy who actually knows what he’s talking about commands respect.”
Editing by Janet Guttsman; and Peter Galloway