Stéphane Lavoie was appointed Deputy Managing Director of the Bank’s Funds Management and Banking Department (FBD), effective 1 March 2016. FBD oversees the fiscal-agent activities of the Bank in the area of debt management (wholesale and retail), foreign reserves and treasury risk management. The department is also responsible for the Bank’s payment and settlement activities and undertakes fundamental research to support FBD’s full range of responsibilities.
In his role as Deputy Managing Director, FBD, Mr. Lavoie is a member of the Strategic Leadership Team and has shared responsibilities for providing leadership and direction to the department. His primary area of oversight responsibility is funds management, which includes debt management and foreign reserves. As part of this role, Mr. Lavoie is Co- Chair of the Foreign Reserves Committee, the Debt and Treasury Management Committee and the Retail Debt Committee, which are decision-making bodies responsible for the government’s domestic funds-management and foreign reserve activities. He is also a member of the Pension Fund Investment Committee, which is responsible for the management of the investment portfolio of the Bank of Canada employee pension fund.
Mr. Lavoie joined the Bank in 2001 and has a wealth of experience in financial markets analysis and operations, collateral and liquidity policies, shadow banking and over-the-counter derivatives, as well as funds management. Before his current position, Mr. Lavoie served as Deputy Chief of the Bank’s Financial Markets Department (FMD) and oversaw teams responsible for the monitoring of markets and the conduct of a range of market operations on behalf of the Bank or the federal government. He also co-chaired the Bank’s collateral working group and represented the Bank of Canada on various international committees, including the Financial Stability Board’s Workstream on Securities Lending and Repos.
Mr. Lavoie graduated with a Bachelor of Business Administration degree and an MBA in Finance from Université Laval and holds the Chartered Financial Analyst designation.
The recent crisis was characterized by widespread deterioration in funding conditions, as well as impairment of the mechanism through which liquidity is normally redistributed within the financial system. Central banks responded with extraordinary measures. This article examines the provision of liquidity by central banks during the crisis as they adapted their existing facilities and introduced new ones, while encouraging a return to private markets and mitigating moral hazard. A review of this experience illustrates the importance of clear principles for intervention, a flexible operating framework, and clear communication and co-operation by central banks. By exposing the degree of interdependence of financial institutions and markets, the crisis highlighted the need for reforms aimed at improving the infrastructure supporting core funding markets and the liquidity of individual institutions.