OTTAWA (Reuters) - Canada’s Conservative government appointed a former investment banker to head the country’s housing agency on Friday, a sign Ottawa is ramping up the agency’s financial expertise as it seeks to rein in its massive mortgage insurance business.
Evan Siddall will become president and chief executive of Canada Mortgage and Housing Corp (CMHC) on January 1 for a five-year term.
Siddall worked most recently as an adviser on financial markets and financial stability to the governor of the Bank of Canada. Before that he held various positions in investment banking and management, including stints at Goldman Sachs and Co GSGSC.UL and BMO Nesbitt Burns (BMO.TO).
“Mr. Siddall brings to the position extensive leadership and senior management experience,” Employment Minister Jason Kenney said in a statement.
“His proven financial and capital markets expertise will be of tremendous value to CMHC.”
Most mortgage insurance in Canada is provided by CMHC and backed by the federal government. In the context of the heated housing market of the past several years and record-high household debt, Finance Minister Jim Flaherty has said he is concerned about the rapid expansion of CMHC’s role in the mortgage insurance business and taxpayers’ exposure to that risk.
Flaherty gave new powers to oversee CMHC to Canada’s banking regulator last year. Also, Flaherty has said he is closely monitoring the agency’s insurance for high-risk mortgages as well as its portfolio insurance business.
He has gone as far as saying he would like to ultimately privatize CMHC’s mortgage insurance business, leaving the agency to perform its traditional role of ensuring affordable housing for Canadians. But most analysts expect the government to introduce only incremental changes to control CMHC and foster a greater role for private insurers.
Siddall’s appointment follows that of another former Wall Street banker, Robert Kelly, who was named CMHC’s chairman in May.
Reporting by Louise Egan; Editing by Peter Galloway