Canada ‘no longer stands out’ on risk: Macklem

Tiff Macklem wants to ensure the global goodwill Canada accrued for demonstrating sound risk management in the years since the 2008 fin an cial crisis doesn’ t slip away as other countries repair and rebuild their financial controls.

As he takes up his new role as chairman of the Global Risk Institute in Financial Servi-

ces, the former senior deputy governor of the Bank of Canada, insists that although this country has enjoyed a competitive edge as a result of the “unusual amount of respect” afforded this country, Canada can still benefit from what the rest of the world has been doing to bolster its risk management systems.

“Canada came through the financial crisis comparatively well and that put this country on the map in a way we hadn’t before,” Macklem said in an interview. However, he concedes, “Canada no longer stands out the way it did.”

And that may not be a bad thing.

For one, Canada is not the only country thinking about risk and all the ways it manifests itself.

“The financial crisis was a stark and painful reminder of the importance of sound risk management,” he said, “Risk isn’t static. It doesn’t take holidays; it just hides.”

Macklem, then a senior government official, lived through the financial crisis in the eye of the storm.

He described GRI’s key role as sustaining “an intense effort to ensure that we are continuing to update our thinking about debt and that we are not standing still.”

The not-for-profit organization, whose 27 members include some of Canada’s largest financial institutions, including Royal Bank of Canada, Manulife Financial Corp., the Caisse de dépôt et placement du Québec and Canada Mortgage and Housing Corp., was founded in 2011 by the federal government, the Ontario government, Toronto Dominion Bank and Manulife Financial Corp.

At the time of its inception, GRI was created to capitalize on the strength of Canada’s risk management when financial institutions around the world, especially in the United States and Europe, were either collapsing or teetering.

Macklem, who is currently dean of the Joseph L. Rotman School of Management at the University of Toronto, would like to see GRI broaden its relationships with financial institutions and policy organizations globally to bring inter-disciplinary thinking to the industry.

The goal is not only to develop “new thinking but to develop new capacity to manage risk,” he explained.

Because no one group or sector has all the answers, Macklem said, GRI will seek to fill the space between the broad views of public policy, the experience of the private sector and the new thinking of academia adapt to new risks as they emerge.

Macklem replaces GRI’s outgoing chairman Paul Cantor as head of a 13-member board.

Last month, the GRI announced the appointment of Bay Street veteran Richard Nesbitt as its new president and CEO, effective May 1.

SEAN KILPATRICK / THE CANADIAN PRESS FILES Tiff Macklem, who is currently dean of the Joseph L. Rotman School of Management at the University of Toronto, says he would like to see GRI broaden its relationships with financial institutions and policy organizations globally.