Carol Ann Northcott

Managing Director and Chief Risk Officer


Carol Ann Northcott is the Bank’s Chief Risk Officer (CRO) and Managing Director of the Financial and Enterprise Risk Department (FER). As CRO, she reports to the Bank’s Board of Directors and works closely with management to identify and assess risks faced by the Bank. As the Managing Director of FER, she leads three teams that oversee enterprise, financial and credit risks.

Ms. Northcott was appointed as Chief Risk Officer in 2017 and as Managing Director of the newly created FER department in January 2019. She first joined the Bank in 1999, and in 2005 became an Assistant Chief in the Financial Stability Department. She was a Director in that department from 2009 to 2013 and represented the Bank on international working groups responsible for developing risk standards for banks and financial market infrastructures. Along with her deep understanding of enterprise risk management, she brings expertise in the Bank’s financial stability and oversight responsibilities.

Ms. Northcott served for three years as Vice President and Chief Risk Officer of Payments Canada, during which time she was responsible for the organization’s enterprise risk management program, security and business continuity planning, and research.

Ms. Northcott holds a master’s degree in financial economics from the University of Toronto.

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Staff working papers

Competition in Banking: A Review of the Literature

Staff Working Paper 2004-24 Carol Ann Northcott
The author reviews the theoretical and empirical literature to examine the traditional perception that the following trade-off exists between economic efficiency and stability in the banking system: a competitive banking system is more efficient and therefore important to growth, but market power is necessary for stability in the banking system.

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Bank publications

Bank of Canada Review articles

November 20, 2002

CLS Bank: Managing Foreign Exchange Settlement Risk

In the foreign exchange market, where average daily turnover is in trillions of dollars and trades span time zones, legal systems, and domestic payments systems, participants take on various risks. The most serious risk is credit risk—the risk that one party will fail to pay. Central banks, private sector financial institutions, and domestic payments systems operators laboured for more than a decade to develop a multi-currency settlement system to deal with these risks. The result, the CLS Bank, began operations in September 2002. It virtually eliminates the credit risk inherent in foreign exchange transactions by providing a payment-versus-payment arrangement for settlement. The CLS Bank is regulated by the Federal Reserve Board in consultation with the central banks that have currencies settling through its system. At present there are seven currencies, including the Canadian dollar. The Bank of Canada acts as banker for the CLS Bank, providing it with a settlement account and making and receiving payments on its behalf through the Large Value Transfer System. With the participation and support of the world's largest foreign-exchange-dealing institutions, and growing membership, the CLS Bank has the potential to become the dominant global mechanism for settling foreign exchange transactions.

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