Not afraid ‘to tell people what they didn’t want to hear’
Carolyn Wilkins, senior deputy governor of the Bank of Canada, is opinionated but measured
On April 11, 2014 Carolyn Wilkins got a phone call from Joe Oliver. Things were shifting in Ottawa’s financial circles: Jim Flaherty had suddenly stepped down as finance minister the previous month, and Oliver had been thrust in as his replacement; Tiff Macklem the senior deputy governor of the Bank of Canada was making his exit, leaving for academia after being passed over for the governor’s job in favour of Stephen Poloz.
Oliver was calling to tell Wilkins, at the time an adviser to the bank’s governor, she was being appointed to a seven-year term in the senior deputy governor’s job.
“It was a great moment. But it was a bit of a sad moment,” Wilkins recalls. “Because it was the same afternoon that we all learned that Mr. Flaherty had died.”
Wilkins began her new role a few weeks later, becoming the first woman to occupy the office—and the only one to have her signature appear on Canadian bank notes.
One year after her appointment, she is quick to temper talk of that accomplishment, pointing out half of the Bank of Canada’s six-person governing council is female.
“The great feature of our governing council isn’t just the gender diversity, but it’s the diversity of backgrounds and the way we think,” Wilkins said during an interview with the Financial Post in a coffee shop in Ottawa’s Glebe neighbourhood.
“For me, we have the right . . . divergence in points of view… I see it as being a natural progression in people’s careers, and the bank always focuses on getting the best people in the job.”
In Canada’s top financial circles, Wilkins, 51, is often credited as having earned that rank. Described as intelligent and determined, opinionated but measured, she went from being on the front lines of the country’s monetary policy to the second-most powerful person at the Bank of Canada.
She’s a central bank veteran of more than a dozen years: after working in analysis at the Finance Department and Privy Council Office with the governments of Brian Mulroney, Kim Campbell and Jean Chrétien, she joined the bank in 2001 in the monetary and financial modelling division, moving up to deputy chief of the financial markets department, and special director of an over-the-counter derivatives market task force. Still, Wilkins remains not particularly well known outside her circle of influence (although it’s an awfully influential circle). She can easily go unrecognized on the streets of even a government town like Ottawa, despite all the years she has worked in the nation’s capital. Even since being appointed the central bank’s senior deputy governor, the recognition factor has been slow in coming.
And that seems just fine with her.
Wilkins prefers not talking about her private life, but she’ll readily indulge any conversation that gets into her passion for economics, and its social benefits.
“Economics is the greatest social science because it’s got this disciplined framework and logic and mathematics, but at the same time it’s all about people. Whether you’re thinking about environment economics, you’re thinking about labour economics or financial economics, at the end of the day it’s about how policies or situations will change the economic realities of everybody on the street out there — and you and I.”
That, she says, has driven her career, leading her to seek out the senior deputy governor job.
“We all new that job was coming open, so it was my decision —at some point — to apply, because I could see myself in that job. And I could see myself really enjoying the job.”
Along with her other responsibilities, Wilkins represents the Bank of Canada on the Financial Stability Board, the Swiss-based group helping to guide global fi- nancial reforms.
This week, walking through the bank’s Ottawa trading floor — the activity hub of its Financial Markets Department, where Wilkins was once second-in-command of market operations, including government bond auctions — she recalls the frenzied atmosphere that came as the bank navigated the global credit crisis in 2008.
“We were doing such an enormous number of transactions. We were taking new sources of collateral that we hadn’t before,” she said.
“What we learned is that liquidity is a pretty fickle friend. But, at the same time, central banks’ are there to do that job, which is to facilitate funding liquidity in times of stress. So, we knew what to do.”
Tim Hodgson, managing partner of Alignvest Management Corp. and special adviser to the previous bank governor Mark Carney, said Wilkins is “really great at pulling people together, and building teams and consensus.”
But she “wasn’t afraid to tell people maybe what they didn’t want to hear,” he said.
“There were many times I was at meetings where she got kind of grilled and beat up by governors, but she built an immense amount of respect with those people because she was willing to tell them what she felt was accurate.”
He recalls how during the financial crisis, he and Wilkins were working on derivatives reform and needed to provide Carney with their recommendations.
“I remember being in that room and she had briefed people ahead of time about what she was going to say… When the governor didn’t like what he had to hear, everybody else kind of faded away, and she stood her ground,” Hodgson said.
“And she backed it up with facts and intellectual rigor. And as unhappy as he [Carney] was to hear that, he respected the analysis. I think, to me, I saw him really take the measure of her and say, ‘this is a unique person.’”
David Wolf remembers other, similar occasions when Wilkins stood firm in line of fire with Carney, who had a reputation for being no softy.
“Not everyone could go toe to toe with the former governor. She was one who was always willing if she really believed in her position, on a particular issue, to fight for it. That’s something I respected a lot — and I think he did too,” said Wolf, portfolio manager for global asset allocation at Fidelity Investments and also a one-time adviser to Carney.
“In my experience, she has managed to retain the ability to see things from multiple perspectives, and to challenge central bank orthodoxy. And that represents an independence of mind that I think is really valuable,” Wolf said. “She is more than willing to hear any good argument and is not wedded to a particular way of looking at the world.”
Wilkins acknowledges it’s her nature to speak her mind “and to say it in a reasoned way.”
“I also think that the thing I admire most about people is that they tell me what they think … policy needs to stand the test of time, and so whether or not somebody’s going to agree with you the day you give that advice is not the most important thing,” she said. “The most important thing is that… you work together to get the right outcome.” She credits the Bank of Canada’s past leader, Carney, and its current one, Poloz, for putting a great deal of value on that.
Douglas Porter, chief economist at BMO Capital Markets, said he finds the communication styles of Poloz and Wilkins “almost ‘yin and yang’ in some ways.”
“She seems to be the calming influence when it comes to the communications style,” he said.
Both are graduates of the University of Western Ontario — as is Porter, by the way, and an uncommon number of Bank of Canada senior people (at the time of Wilkins’ appointment last year, there were three Western alumni in toplevel positions at the central bank, the third being deputy governor Timothy Lane; Macklem was too, before he left to become dean of University of Toronto’s Rotman School of Management).
Wilkins came to Western after first attending Wilfrid Laurier University, by way of her home in Selwyn, a small town near Peterborough, Ont.
“I love where I grew up,” she said. “We lived in the middle of nowhere, I like to say. At the crossroad where there’s just a gas station, where I had my first job — pumping gas.”
Poloz brought to the job an early flair for truly colourful analogies — comparing spaghetti sauce with its bubbles and craters, for example, to the process of economic recovery — that often bemused as much as amused. Wilkins’ demeanor might best be summed up as thoughtful and measured.
Porter says he has noticed in Wilkins a clarity and consistency at a time when the economy — and to some extent the bank — have been tumultuous.
“The economy was operating well below slack… and then we got hit with the oil shock. The view at the bank, I think, was that the economy could use the help from lower rates and a lower currency. In a way, it’s very consistent with what her view was, even before the oil prices tumbled.”
“I think on that front, she does a very good job,” Porter said. “I don’t remember really anything she said that has caused upset in the markets. I think she’s very much stayed on her message.”
I love where I grew up. We lived in the middle of nowhere