Lawrence Schembri served as Deputy Governor from 2013 until his retirement from the Bank of Canada in June 2022. In this capacity, he was one of two deputy governors responsible for overseeing the Bank’s analysis and activities promoting a stable and efficient financial system. From 2016, he supervised the Bank’s analysis of domestic economic developments. As a member of the Bank’s Governing Council, he shared responsibility for decisions related to monetary policy and financial system stability and for setting the Bank’s strategic direction.
Mr. Schembri joined the Bank in 1997 as a visiting Research Advisor in what is now the International Economic Analysis Department. In 2001, he was appointed Senior Research Director in the same department and became its Managing Director in 2005. In 2010 he was appointed Advisor to the Governor, with responsibilities for financial stability analysis and coordinating the Bank’s contribution to the Financial Stability Board.
While at the Bank, Mr. Schembri was an active researcher. His published works focused on exchange rate and monetary theory and policy in open economies, the international monetary system and financial stability. He was also active in university recruiting and sponsored the Governor’s Challenge undergraduate student competition. A champion of efforts to promote economic opportunity and inclusion for Indigenous Peoples, Mr. Schembri was a founding member of the Central Bank Network for Indigenous Inclusion.
Born in Toronto, Ontario, Mr. Schembri received a Bachelor of Commerce degree from the University of Toronto in 1979, an MSc in Economics from the London School of Economics and Political Science in 1980 and a PhD in Economics from the Massachusetts Institute of Technology in 1985. After completing his PhD, Mr. Schembri was an assistant professor and, later, associate professor of economics at Carleton University until 2001.
Staff discussion papers
Strengthening Inflation Targeting: Review and Renewal Processes in Canada and Other Advanced JurisdictionsWe summarize the review and renewal process at four central banks (Reserve Bank of New Zealand, Bank of England, Sveriges Riksbank and the US Federal Reserve Bank) and compare them with the process at the Bank of Canada, which has been well-established since 2001.
External Stability, Real Exchange Rate Adjustment and the Exchange Rate Regime in Emerging-Market EconomiesIn emerging-market economies, real exchange rate adjustment is critical for maintaining a sustainable current account position and thereby for helping to reduce macroeconomic and financial instability.
Staff working papers
Productivity, the Terms of Trade, and the Real Exchange Rate: The Balassa-Samuelson Hypothesis RevisitedThe paper examines how the Balassa-Samuelson hypothesis is affected by a modern variation of the standard model that allows product differentiation (within the traded and nontraded goods sectors) with the number of firms determined exogenously or endogenously.
Canada's Pioneering Experience with a Flexible Exchange Rate in the 1950s: (Hard) Lessons Learned for Monetary Policy in a Small Open EconomyThis paper revisits Canada's pioneering experience with floating exchange rate over the period 1950–1962. It examines whether the floating rate was the best option for Canada in the 1950s by developing and estimating a New Keynesian small open economy model of the Canadian economy.
Bank of Canada Review articles
The Economy, Plain and Simple
Financial System Review articles
- "Current Account Dynamics, Real Exchange Rate Adjustment and the Exchange Rate Regime in Emerging-Market Economies"
(with Olivier Gervais and Lena Suchanek), Journal of Development Economics, Vol. 119, March 2016, p. 86-89.
- "Building an Open, Integrated, and Resilient Global Financial System: The Road to Brisbane and Beyond"
Canadian Public Policy, 2014, 40(4): p. 408-412.
- "Housing Finance in Canada: Looking Back to Move Forward"
National Institute Economic Review, 2014, 230: p. R45-R57.
- "Productivity, Commodity Prices and the Real Exchange Rate: The Long-Run Behavior of the Canada-US Exchange Rate"
(with Ehsan Choudhri), International Review of Economics and Finance, 2014, 29: p. 537-551.
- “Multilateral adjustment, regime switching and real exchange rate dynamics”
(with Ali Dib, Takashi Kano and Jeannine Bailliu) North American Journal of Economics and Finance, Vol. 27, January 2014, pages 68-87.
- "Productivity, the Terms of Trade, and the Real Exchange Rate: The Balassa-Samuelson Hypothesis Revisited"
(with Ehsan Choudhri), Review of International Economics, 2010, 18 (5) p.924-36
- "Canada's Pioneering Experience with a Flexible Exchange Rate in the 1950s: (Hard) Lessons Learned for Monetary Policy in a Small Open Economy"
(with Michael Bordo and Ali Dib), International Journal of Central Banking, 2010, 6 (3): p.51-99
- "Canada and the IMF: Trailblazer or Prodigal Son?"
(with Michael Bordo and Tamara Gomes), Open Economies Review, 2010, 21(2): p.309-33
- "Exchange Rate Policy in Canada: Lessons from the Past: Implications for the Future"
Current Politics and Economics of Europe, 2006, 17 (1): p.99-126 (Reprinted in A. Verdun (ed.) Britain and Canada and their Large Neighbouring Monetary Unions (Nova, 2006) p.77-98)
- "Revisiting the Case for Flexible Exchange Rates in North America"
(with John Murray and Pierre St-Amant), North American Journal of Economics and Finance, 2003, 14: p.207-240. (Reprinted in L. Michelis and M. Lovewell (eds) Exchange Rates, Economic Integration and the International Economy (APF Press, 2004), p.77-113).
- "A Tale of Two Dollars: The Future of Canada's Currency"
(with Robert Lafrance) Management Internationale, 2003, 8: p.53-64.
- "Productivity Performance and International Competitiveness: An Old Test Reconsidered"
(with Ehsan Choudhri) Canadian Journal of Economics, 2002, 35(2): p.341-62.
- "Living Around the Bloc: Lessons from Canada for Small Countries"
Journal of Public Policy, 2002, 22(2): p.119-142.
- "The Real Effects of Collapsing Exchange Rate Regimes: An Application to Mexico,"
(with Patrick Osakwe), Journal of International Economics, 2002, 57(2): p.299-325.
- "Trade Liberalization and Sectoral Productivity Growth: Some Evidence for Canada and the United States,"
(with Richard Brecher and Ehsan Choudhri) Journal of International Economics, 1996, 40: p.299-321.
- "The Role of Canadian Banks in 19th Century U.S. Banking Crises,"
(with Jennifer Hawkins) Business History, 1992, 34(3): p.122-52.
- "The Construction of Establishment-Level Capital Stock Series,"
(with Eugene Beaulieu), Journal of Economic and Social Measurement, 1990, 16: p.55-70.
- "Atheoretical and Structural Approaches to Modelling Canadian-American Macroeconomic Interaction,"
(with David Johnson) Empirical Economics, 1990, 15(4): p.367-82.
- "Macroeconomic Stability and Policy Rules in a two sector model of an open economy,"
Canadian Journal of Economics, 1988, 21(1): p.87-96.
- “Credibility, Flexibility and Renewal: The Evolution of Inflation Targeting in Canada” (with T. Carter and R. Mendes) in J. Simon and M. Sutton (eds.) Central Bank Frameworks: Evolution or Revolution? Reserve Bank of Australia conference proceedings.*
- A discussion of “Is There Macroprudential Policy Without International Cooperation?” by S. Cecchetti and P. Tucker (with F. Ghironi) in the proceeding of the Federal Reserve Bank of San Francisco Asia Economic Policy Conference, Challenges in a Diverging Global Economy. 2018: 115-120.
- "The Future of the IMS: The New ‘Holy Trinity’ of External, Monetary, and Financial Stability"
(with Eric Santor) in M Uzan (ed.), Bretton Woods: The Next 70 Years (Reinventing Bretton Woods Committee, 2015) p. 335-342.
- "A Tale of Two Countries and Two Booms – Canada and the United States in the 1920s and the 2000s: The Roles of Monetary and Financial Stability Policies"
(with Ehsan Choudhri) in O. Humpage (ed.), Current Federal Reserve Policy Under the Lens of Economic History: Essays to Commemorate the Federal Reserve System's Centennial, (Cambridge, 2015) p. 267-295.
- "Success Under Pressure: The Bank of Canada and the Global Financial Crisis – Actions and Lessons"
(with Eric Santor), in R. Medhora and D. Rowlands (eds.), Crisis and Reform: Canada and the International Financial System (Centre for International Governance Innovation, 2014) p.103-118.
- A discussion of « Terms of Trade Shocks and Fiscal Cycles »
by Graciela Kaminsky (in R. Fry, C. Jones and C. Kent (eds.) Inflation in an Era of Relative Price Shocks (Reserve Bank of Australia, 2010) p.251-257
- "The Case for Financial Liberalization"
(with Eric Santor) in H. Bougrine and M. Seccareccia, (eds.), Introducing Macroeconomic Analysis: Issues, Questions, and Competing Views (Emond Montgomery Publications, 2010) p.271-282
- "Macroeconomic Stability and Economic Resilience in Small States: The Role of Macroeconomic Policies"
in L. Briguglio, G. Cordina, N. Farrugia and C. Vigilance (eds.) Small States and the Pillars of Economic Resilience (University of Malta and Commonwealth Secretariat, 2008), p. 37-58.
- A discussion of « Monetary Policy in East Asia: Common Concerns »
by Marvin Goodfriend, in Growth, Integration, and Monetary Policy in East Asia, (Bank of Japan, 2007), p. 226-232.
- "External Adjustment and Debt Sustainability"
(with Douglas Hostland) in R. Driver, P. Sinclair and C. Thoenissen (eds.), Exchanges Rates, Capital Flows and Policy, (Routledge, 2005) p. 261-300.
- "Productivity and Trade in North America: A Sectoral Analysis"
(with Mykyta Vesselovsky) in R. Harris (ed.), North American Linkages: Opportunities and Challenges for Canada, (Industry Canada & University of Calgary Press, 2004), p.89-116.
- "International Financial Architecture Reform: Just Tinkering Around the Edges"
(with Malcolm Knight and James Powell) in C. L. Gilbert, J. Rollo and D. Vines (eds.), The IMF and Its Critics: Reforming of the Global Financial Architecture, (Cambridge University Press, 2004), p. 124-157.
- "Measuring the Barriers to Trade in Services: Literature and Methodologies"
(with Zhiqi Chen) in J. Curtis and D Ciuriak (eds.) Trade Policy Research 2002, (Department of Foreign Affairs and International Trade Canada, 2002).
- "Productivity Growth and International Competitiveness: The Experience of Canada and Implications for India,"
(with Ehsan Choudhri) in Trade, Innovation and Industrial Performance. (Conference Board of Canada, 1997) p. 21-28.
- "Canadian Exports of Business and Education Services to the Asia-Pacific region,"
in R. Harris (ed.), The Asia-Pacific Region in the Global Economy: A Canadian Perspective. (University of Calgary Press, 1996) p. 165-196.
- "Canada and International Trade: Policies for the 1990s,"
in F. Hampson and C. Maule (eds.), Canada Among Nations: 1990-1991 (Lorimer Press, 1991) p. 41-64.
- "Exchange Rates and Export Prices: An Industry Approach,"
in R. Feenstra (ed.), Trade Policy and International Competitiveness (University of Chicago Press, 1989) p. 185-210.
- A discussion of "Per-Capita Income as a Basis for Trade,"
by Linda Hunter and James Markusen, in R. Feenstra (ed.), Empirical Methods in International Trade, (MIT Press, 1988) p. 110-113.
- "Industrial Adjustment in Canada: Causes and Effects,"
(with Jeffrey Bernstein) in B. Tomlin and M. Molot (eds.), Canada Among Nations: 1986-1987 (Lorimer Press, 1987) p. 87-105.
Publications from working groups
- Financial Stability Board Regional Consultative Group for the Americas (L. Schembri co-chair of Working Group on Shadow Banking). 2015. “Second Report on Shadow Banking in the Americas”
- Financial Stability Board Standing Committee on Standards Implementation (L. Schembri co-chair of Peer Review). 2014. “Peer Review of the Netherlands”
- Financial Stability Board Regional Consultative Group for the Americas (L. Schembri co-chair of Working Group on Shadow Banking). 2014. “Report on Shadow Banking in the Americas”
- Financial Stability Board (L. Schembri co-chair of report committee). 2012. “Identifying the Effects of Regulatory Reforms on Emerging Market and Developing Economies: A Review of Potential Unintended Consequences”