Le Pan exit comes as a surprise

Mr. Le Pan has offered no reasons publicly for his departure, which comes five years into his seven-year term of office, but he is expected to make a statement today.

The Globe and Mail
July 14, 2006

Le Pan exit comes as a surprise
Ottawa, Bay St. praise regulator's five-year legacy
Janet McFarland and Brian Laghi

TORONTO OTTAWA — Officials in Ottawa and on Bay Street were surprised yesterday to learn Canada's top financial services regulator is stepping down with two years remaining in his term of appointment.

Nicholas Le Pan, head of the Office of the Superintendent of Financial Institutions since 2001, told employees Wednesday he had tendered his resignation and will leave Oct. 13. Mr. Le Pan has offered no reasons publicly for his departure, which comes five years into his seven-year term of office, but he is expected to make a statement today.

Sources within the banking community and the government said they were surprised by Mr. Le Pan's decision, but praised his legacy as Canada's watchdog overseeing banks, insurers and pension plans.

One senior official said the government typically hopes to learn in advance about an impending resignation in such a sensitive area before it is made public so it can quietly manage the issue.
However, the man who heads the civil service, Privy Council Clerk Kevin Lynch, only learned of the impending resignation earlier this week. A source said Finance Minister Jim Flaherty got the letter late Monday or early Tuesday and that Mr. Lynch learned about the impending resignation around the same time.

Meanwhile, a banking official said there were no rumours on Bay Street of Mr. Le Pan's impending departure but said it's not likely that Mr. Le Pan was pushed to leave the post because few controversies took place under his time at the helm.

"I never heard of anybody saying anything untoward about Nick and how he's run OSFI, so I really think you can dismiss any possibility of some bank CEO or other CEOs putting pressure on Harper or on Lynch to get rid of Nick."

Indeed, senior business officials yesterday lauded Mr. Le Pan's leadership at OSFI, saying he was a pragmatic regulator who helped raise Canada's profile in international banking circles.

Bharat Masrani, chief risk officer at Toronto-Dominion Bank, said Mr. Le Pan had a unique ability to champion policies that enhanced investor protection without imposing undue costs on financial institutions.

"He had a vision for Canadian banks," Mr. Masrani said. "He was tough, but very fair, and always looked at what was commercially sensible and was there a way to make this a win-win for Canada and for the financial services industry."

Mr. Le Pan led the accord implementation group of the Basel Committee on Banking Supervision, and was later appointed to the new position of vice-chairman of the Basel Committee, giving Canada a significant voice in crafting a new set of international banking rules.

"For a country of our size to have the influence and the prestige internationally, a lot of that was thanks to Nick," Mr. Masrani said.

During his five years in office, Mr. Le Pan was most aggressive in his role overseeing federally regulated pensions, pressuring companies such as Air Canada to repay shortfalls in employee pension plans. Under Mr. Le Pan, OSFI developed stress tests to assess early signs of weakness in pension plans.

"His reputation has been very protective of members of federally protected pension plans," said Ian Markham, a partner at pension consulting firm Watson Wyatt Worldwide. "He was very keenly aware of the need to protect them."

Rumours around Toronto financial circles suggested Mr. Le Pan was interested in an overseas job, such as the Bank for International Settlements, an organization that fosters international monetary and financial co-operation.

"Certainly that would have been a logical next step. I've heard that for a while," said a source.

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