Canada’s financial community facing changing of the guard

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Come 2014, the titans of Canada's financial sector will have to welcome a slew of new names to the family.

After years of stability during which there was little turnover at the top of the country's biggest financial institutions and regulators, suddenly there is a flurry of change that will put new faces at their helms.

The most recent departure was announced Tuesday when Julie Dickson, the head of the Office of the Superintendent of Financial Institutions, announced that she would not seek another term when her current one expires in summer 2014.

But the changeover is also prevalent on Bay Street, where both Bank of Nova Scotia and Toronto-Dominion Bank will soon get new chief executive officers, and Ontario Teachers' Pension Plan will replace retiring head Jim Leech.

Spread the net a little wider and you can rope in Canada Mortgage and Housing Corp., whose policies have a big effect on the banks. Chief executive officer Karen Kinsley recently announced in CMHC's annual report that she would step down, and the organization also just appointed Robert Kelly as its new chair.

In some cases, the turnover stems from fixed term lengths. Julie Dickson's, for instance, is seven years long, and she'd rather give up the post than commit to another term of the same length.

However the changing economic environment has also opened the floodgates for change. Coming out of the financial crisis, the last thing investors needed was extra uncertainty regarding who would navigate some of the country's biggest ships through the storm.

Today, the storm looks more like overcast skies with some sun peeking through, and that's provided enough stability to implement the changes.

Of course, that doesn't remove the uncertainty. The new head of OSFI will also have oversight of CMHC, and that puts a lot of power into his or her hands. Canada's banks have also basked in the spotlight for being so stable during the crisis, but at some point U.S. banks will start growing rapidly again, and no one knows how the new (or even the existing CEOs) will adapt.

Such uncertainty will no doubt raise speculation about what our financial sector will look like in a few years. But the truth is that no one really can know, in large part because the rules keep changing. Just look at the major reversal the federal government instituted on mortgage rules that changed how the banks do business.

So for now, let's wish the newcomers the best of luck. They just might need it.

(Tim Kiladze is a Globe and Mail Reporter.)

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