December 5, 2013 / 7:53 PM / 5 years ago

Bank of Canada No. 2 Tiff Macklem to leave in May

OTTAWA (Reuters) - Bank of Canada Senior Deputy Governor Tiff Macklem is resigning in May 2014 to become dean of a business school in Toronto, the central bank said on Thursday, some six months after Macklem was passed over for the job of governor.

Bank of Canada Senior Deputy Governor Tiff Macklem speaks during a banking event in Mumbai August 24, 2011. REUTERS/Danish Siddiqui

Macklem had been widely seen as the front-running candidate to replace Mark Carney as governor at the Bank of Canada, but in May the government appointed another prominent economist, Stephen Poloz, instead. Poloz took over in June.

The announcement that Macklem is leaving to take a job at the University of Toronto’s Rotman School of Management comes a day after the bank turned slightly more dovish, warning about the risk of inflation falling below target.

Economists who watch the central bank closely said they did not expect Macklem’s departure to have any significant effect on policy, since the six-member governing council makes decisions by consensus rather than by vote.

“There is no current indication of any rift within the so-called center bloc at the Bank of Canada, so Tiff leaving doesn’t imply some champion of some cause is no longer there,” said Paul Ferley, assistant chief economist at the Royal Bank of Canada.

“There’s no expectation that policy will be altered in any material way, but we’ll have to see who gets appointed the new senior deputy governor.”

Macklem praised Poloz and his other central bank colleagues and the bank’s “first-rate research and policy formulation.”

“Canada’s economy is in good hands,” he said in the statement issued by the central bank.

Poloz, the former head of Canada’s export agency who took the helm earlier this year, also heaped praise on his second-in-command.

“Tiff has dedicated nearly 30 years to the bank and to Canada, and his influence can be seen in every aspect of our work and in central banking worldwide,” Poloz said.

“I look forward to our continuing close collaboration during the months leading up to his departure.”

The mild-mannered Macklem has spent most of the past 25 years at the Bank of Canada and has held the No.2 job there since 2010. He did two stints at Canada’s finance ministry, and was the government’s point man at the Group of Seven and Group of 20 discussions from 2007 to 2010, throughout the global financial crisis.

Canadian Finance Minister Jim Flaherty’s office was not immediately available for comment.


The bank will form a special committee of directors to recruit Macklem’s successor. The appointment must be approved by Conservative Prime Minister Stephen Harper’s cabinet.

One obvious first place to look would be among the remaining members of the bank’s governing council. The four deputy governors are John Murray, Timothy Lane, Agathe Cote and Lawrence Schembri.

There are also eight advisers to the governing council, among them the respected central bank veteran Donna Howard.

“The question would be, will it be from inside the bank or someone from outside,” said Craig Alexander, chief economist at Toronto-Dominion Bank.

“They have very strong internal candidates. They have lots of bench strength so they can draw on that to promote from within if they want to,” he said.

Many other potential contenders emerged in the lead-up to recent central bank appointments. These included Jean Boivin, a former deputy governor now at the finance ministry; Darrell Duffie, a Stanford University professor; Andrew Spence, managing director at the OMERS pension fund; Chris Ragan, a McGill University professor, and others.

Additional reporting by Solarina Ho in Toronto and David Ljunggren in Ottawa; Editing by Jeffrey Hodgson and James Dalgleish

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