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The federal government has named Peter Routledge as the head of Canada’s banking regulator, choosing a former financial analyst and federal policy adviser with a keen understanding of the financial system’s intricacies who also has recent experience running a federal agency.

Mr. Routledge will take the helm of the Office of the Superintendent of Financial Institutions (OSFI) for a seven-year term as superintendent on June 29. He moves from his current post as chief executive of the Canada Deposit Insurance Corp., after a stint at the federal Finance Department and a Bay Street career analyzing and rating large Canadian banks and other institutions.

He succeeds Jeremy Rudin, who has led the regulator since 2014 and will step down when his term ends on Monday.

Mr. Routledge possesses a wonkish familiarity with the inner workings of the capital and liquidity rules that form the backbone of regulation for Canada’s financial sector. One of his first big decisions will be when to lift temporary restrictions on dividend payouts and share buybacks implemented in response to the COVID-19 pandemic that have left banks flush with extra capital.

For now he said he favours the position adopted by Mr. Rudin, that “it’s better to err on the side of keeping these restrictions on a bit too long than unwinding them a bit early.”

He also assumes his new role at a time when OSFI has placed added emphasis on non-financial risks that are gaining prominence, from climate change and cybersecurity to issues of culture and conduct inside banks.

“I’m inheriting an organization that’s performed exceptionally well through a once-in-a-century pandemic. I think the financial sector’s resilience shone through,” Mr. Routledge said in an interview. “Good thing we have that resilience, because we face a risk environment in front of us that will be filled with challenges.”

He became CEO of CDIC in 2018, where he reorganized the deposit insurer’s staff and structure while working to raise its profile. Before that, Mr. Routledge served as a senior adviser in the Department of Finance, focusing on policy issues that included financial stability, housing markets and competition in financial services.

That followed a career as a bond rater and analyst, first covering Canadian financial institutions for ratings agency Moody’s Canada, and then as an equity analyst at National Bank Financial Inc., where he was managing director of research.

“He has distinguished himself in both the public and private sectors and I know his leadership and eye for innovation will be of immense value, particularly as we navigate the end of the COVID crisis and Canada’s economic recovery,” said Chrystia Freeland, Deputy Prime Minister and federal Finance Minister, in a statement announcing Mr. Routledge’s appointment on Thursday.

In his past roles, Mr. Routledge relished the down-in-the-weeds details of the banking and life insurance sectors, and developed instincts to look for emerging risks. Colleagues say he is a steady, even stoic presence.

“He has a sharp policy mind and strong leadership skills,” said Carolyn Rogers, Secretary-General of the Basel Committee on Banking Supervision, who worked with Mr. Routledge when she was a senior official at OSFI.

As an analyst, Mr. Routledge routinely sounded warnings about the risks of high household debt, and he inherits a hot-button file as those risks have risen in recent years, driven by low interest rates and hot housing markets. OSFI has toughened underwriting standards for mortgage lenders and twice tightened a stress test for borrowers since 2018, while federal policy-makers have made further moves to cool housing price increases.

Mr. Rudin said he thinks, “so far, what we’ve done in the area of mortgage underwriting has been effective.” But he acknowledged initiatives so far “have not solved all of Canada’s housing-related problems.”

With housing markets remaining hot and prices rising quickly, Mr. Routledge said he favours a “persistent, gradual approach” to regulation to ensure the system can “weather the inevitable volatility.”

His predecessor, Mr. Rudin, arrived at OSFI from the federal Finance Department at a time when regulators were building a new capital regime to make banks more resilient after the global financial crisis of 2008-09. Those efforts compelled banks to build much larger reserves of capital and liquidity, and have helped them stay resilient through the pandemic as their strength has been severely tested.

At the onset of the crisis last year, “we were out there saying, ‘You know, Canadians have a lot of things to worry about with this pandemic. One of them is not the stability of the Canadian financial system,’” Mr. Rudin said in an interview this week. “I never pretended that we at OSFI knew how this pandemic was going to play out. But nonetheless, the financial system was ready because it had these broad, adaptable, resilient features.”

As those reforms enter their final stages, capital and liquidity are still the “touchstones” of OSFI’s approach to preparing the financial system for the next shock, Mr. Rudin said. But the regulator’s focus has started to shift. OSFI is in the midst of consultations on new risks from technology and climate change, and has built up internal groups focused on those topics, as well as culture and conduct.

“What we should return our attention to is thinking about resilience in the context of these newer risks that are difficult to quantify, difficult to measure,” Mr. Routledge said.

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