The appointment of Stephen Poloz as Governor of the Bank of Canada was a surprise to most observers. Tiff Macklem, the Deputy Governor, the widely predicted successor, would have been an excellent choice, too. Nonetheless, Mr. Poloz, the CEO of Export Development Canada, can be expected to bring a particular knowledge and experience of the “real economy”: credentials well suited to the coming years.
The experience of Mark Carney, the outgoing Governor, in the capital markets was a great asset in the financial crisis. That was not planned, because the financial crisis was not foreseen, but it worked out well. He had good rapport with bank CEOs and understood their world from the inside.
Today, Mr. Poloz’s several years’ experience at Export Development Canada, as a lender to non-financial corporations, may itself turn out to be a strong asset. He is well versed in the economics of monetary policy, but his feel for the broader industrial and commercial sectors may be more valuable, now that monetary policy and the Bank’s policy rate are in a holding pattern. Reportedly, Mr. Poloz had a substantial involvement in the government’s largely successful decision to rescue the auto sector; if so, that is another testimony to his ability to communicate with a wide range of executives – and with the civil service.
The Harper government expanded the role of EDC as part of its response to the recession, making it a lender to domestic business as well as to exporters. In effect, Mr. Poloz can serve as the country’s chief economist, having read the pulse of the Canadian economy and developed many international contacts, too.
Mr. Poloz acquitted himself well as his first press conference. He was assured yet modest; he has a common touch, in contrast with the sometimes urbane air of Mr. Carney (which may serve him well in London). Jim Flaherty, the Finance Minister, and the Bank’s board have made a good, though not an obvious choice.