THE ECONOMICS OF MONEY,BANKING, AND FINANCIAL MARKETS 415

CHAPTER 15 Central Banks and the Bank of Canada 383 FO RMAL STRU CT U RE O F TH E BAN K OF C AN ADA The overall responsibility for the operation of the Bank of Canada rests with a Board of Directors, which consists of fifteen members the governor, the senior deputy governor, the deputy minister of finance, and twelve outside directors The Board appoints the governor and senior deputy governor with the government s approval, for a renewable term of seven years The outside directors are appointed by the minister of finance, with Cabinet approval, for a three-year term, and they are required to come from all regions of Canada representing a variety of occupations with the exception of banking The governor of the Bank is the chief executive officer and chairman of the Board of Directors Currently, the governor of the Bank of Canada is Mark Carney (see the Inside the Central Bank box, The Political Environment and the Bank of Canada) In 1994 the Board of Directors made some changes in the internal organization of the Bank Most prominently the Board established a new senior decisionmaking authority within the Bank called the Governing Council The Council is chaired by the governor and is composed of the senior deputy governor and four deputy governors Since this change, the six members of the Governing Council of the Bank collectively assume responsibility for the Bank s new semiannual Monetary Policy Report, published in April and October, and its Update, published in January and July This system of collective responsibility ensures that the Bank s governor is not personally identified with the Bank s policy THE FU NC TI O NS O F TH E BAN K OF CAN ADA In the words of the preamble of the Bank of Canada Act, the functions of the Bank of Canada are to regulate credit and currency in the best interests of the economic life of the nation, to control and protect the external value of the national monetary unit and to mitigate by its influence fluctuations in the general level of production, trade, prices and employment, so far as may be possible within the scope of monetary action, and generally to promote the economic and financial welfare of Canada INSIDE THE CENTRAL BANK The Political Environment and the Bank of Canada Since the inception of the Bank of Canada there have been eight governors: 1935 1955 1961 1973 1987 1994 2001 2008 1954, Graham Towers 1961, James Coyne 1973, Louis Rasminsky 1987, Gerald Bouey 1994, John Crow 2000, Gordon Thiessen 2007, David Dodge , Mark Carney It is interesting to note that during the same period, Canadians went to the polls more than twenty times to elect a federal government The Bank of Canada is not completely independent from the government For example, the government can directly influence the Bank by not renewing the governor s appointment when it expires, as the Liberal government did in 1994 when it didn t renew the appointment of John Crow, who was appointed by the Conservative government in 1987