TORONTO (Reuters) - The Bank of Canada named Carolyn Wilkins as its senior deputy governor on Friday, promoting an insider with strong financial markets expertise and credibility with Bay Street bankers as the central bank’s No. 2 policymaker.
Wilkins, with more than a decade of experience inside the bank and most recently as adviser to the governor, will start her seven-year term May 2.
She replaces Tiff Macklem, who is leaving to become dean of a business school in Toronto and will be the first woman to hold the position.
Bank of Canada Governor Stephen Poloz said the range of ideal qualifications for the job “just pop out of this candidate” and described Wilkins as a “jack of all trades.”
She has experience in economic research, forecasting and project management, he said. She headed the bank’s financial stability department during the global financial crisis and negotiated with financial market players on complex new rules for collateral used in the over-the-counter derivatives market.
Her skills fill a gap among the bank’s top policymakers, where there is more macro-economic experience than financial markets expertise since the departure of Mark Carney last year to lead the Bank of England.
“Having that awareness and direct hands-on interaction with (financial market) players I think is a positive thing,” said Poloz. “That diversification of experience and abilities is important to us.”
Hiring a woman was not a conscious decision, Poloz said, but an added bonus.
He also said he appreciated Wilkins’s institutional memory as he is relatively new on the job. He took over as governor last June, although he worked at the central bank for several years earlier in his career.
Wilkins will take up the role at a time when the central bank’s concerns about the weak inflation environment have seen it shift to a more neutral policy stance.
She will sit on the six-member governing council, which sets interest rates. While rates are expected to stay low into next year, the duration of her term will almost certainly see the central bank aim to navigate raising rates without disrupting economic growth. The Bank of Canada has kept rates at 1 percent since 2010.
“The Bank of Canada has pretty good bench strength, and Carolyn is a perfect example of that,” said Craig Wright, chief economist at Royal Bank of Canada.
“She can be working a model in her head and manage to communicate to people. In today’s environment, central banks are increasingly leaning on communication arguably as a policy tool, so I think she’s perfectly positioned to be in there.”
Wilkins is equally at ease in English and French and her strong speaking skills will come in handy, said Poloz.
“Carolyn is a great communicator. You’ll see that immediately,” he said.
The senior deputy job previously included responsibilities as the central bank’s chief operating officer, but the bank recently created a separate position for those administrative duties. Filipe Dinis was appointed to that position earlier this month.
Wilkins joined the bank in 2001 and is currently adviser to Poloz. She also serves as secretary to the bank’s Governing Council and leads the preparation of the bank’s quarterly Monetary Policy Reports.
She will likely take over some of the international responsibilities held by Macklem, such as representing the bank at the Financial Stability Board, the global task force on financial regulation.
“It is very much in keeping with the bank of old, as opposed to bringing somebody new that would try to introduce a different approach to policy,” said David Tulk, chief Canada macro strategist at TD Securities, who said he worked with Wilkins briefly in the early days of his career at the Bank of Canada.
“She’s certainly a qualified choice and I think reflects the era of when Governor Poloz was previously there in a research capacity as head of the research group. That’s someone he would’ve known and probably worked with over that period.”
The selection was made by the independent members of the bank’s board and was approved by the government.
Additional reporting by Alastair Sharp, Solarina Ho and Louise Egan in Washington; Editing by Leslie Adler and Ken Wills