BLOOMBERG: Stephen Poloz Named Bank of Canada Head Replacing Carney

By Greg Quinn – May 2, 2013 11:15

Canada named Stephen Poloz, the head of the nation’s export-financing agency, to lead the Bank of Canada, replacing Mark Carney.

The central bank announced the appointment, effective June 3, in a statement today from Ottawa. Carney is scheduled to depart June 1 and take over as Bank of England Governor a month later.

Canada has named Poloz the head of the nation’s export-financing agency, to lead the Bank of Canada, replacing Mark Carney. Source: Export Development Canada

Poloz, 57, is chief executive officer of Export Development Canada, a government trade financing agency. He joined EDC in 1999 as chief economist after three years with Bank Credit Analyst Research in Montreal and 14 years at the Bank of Canada in roles that included head of the research department.

“After pursuing an exhaustive domestic and international search to find the best candidate for this important and challenging role, the board ultimately found such an individual in Stephen Poloz,” said David Laidley, the central bank director who led the search, in the statement. Poloz “has significant knowledge of financial markets and monetary policy issues and extensive management experience.”

Poloz will take over responsibility for setting Canada’s benchmark interest rate, which has been 1 percent for more than two years. Policy makers in the world’s 11th largest economy are grappling with a strong currency and sluggish global demand that are hampering exports, record consumer-debt loads that are curbing spending and inflation below the central bank’s 2 percent target.

The Bank of Canada is alone in the Group of Seven signaling that an increase in rates is possible while central banks in the U.S., Europe and Japan purchase assets to spur growth.

Stimulus Withdrawal

Bank of Canada policy makers said in an April 17 decision that “considerable monetary policy stimulus currently in place will likely remain appropriate for a period of time, after which some modest withdrawal will likely be required.” The bank also cut its 2013 growth outlook to 1.5 percent from 2 percent because of lower business investment and government spending and said economic slack will persist for more than two years.

Like the Bank of Canada, Poloz said Canadian exporters are under pressure from a persistently strong Canadian dollar and must find new markets and products to remain competitive. “Our exporters face stiff competition from new entrants and a strong currency,” Poloz said in an April 2012 speech in Tokyo.

Poloz’s “recent experience with struggling exporters might incline him to maintain the current dovish trajectory for policy,” said Eric Lascelles, chief economist with Royal Bank of Canada’s Global Asset Management unit in Toronto, before the announcement. “He has clearly had enormous success in everything he touched,” Lascelles said, pointing to Poloz’s climb to lead the export agency.

Bypasses Deputy

The selection of Poloz as the ninth governor of the bank founded in 1934 bypasses Tiff Macklem, 51, who was Carney’s top deputy and the candidate economists predicted would be promoted to the top job. It’s the third straight time the senior deputy failed to be promoted to the governor’s job, following David Dodge who moved from the finance department to take the helm in 2001, and Carney, a former Goldman Sachs Group Inc. banker, in 2008.

To contact the reporter on this story: Greg Quinn in Ottawa at [email protected]

To contact the editors responsible for this story: David Scanlan at [email protected]; Christopher Wellisz at [email protected]