For 27 years William Kennett worked in bureaucratic anonymity, rising through the trade and finance areas of the federal public service until 1977, when he was appointed inspector general of banks under the minister of finance. Then, last year, Kennett was suddenly thrust into a political maelstrom when two Alberta-based banks collapsed. In Ottawa opposition MPs called for his resignation. At the same time, a series of government and judicial inquiries began to reveal in embarrassing detail the shortcomings of Canada’s system of banking regulation—much of it Kennett’s responsibility. Last week Kennett, 53, said that he was taking early retirement at the end of this month. “The guy’s been on the carpet day after day,” said Conservative MP Don Blenkarn, chairman of the Commons finance committee. “He has really been required to protect the ministers he works for, and he felt that he physically couldn’t carry the can any more.” Despite widespread speculation that Kennett would not .survive the controversy, last week he said that there was no pressure on him to resign. “The job’s been very hard on my personal life,” he said. “It has been particularly hard the last year.” Officially, the search for a replacement has not yet begun. But one source close to the finance department said that at least two people, both top executives of financial institutions, were offered the job last month and turned it down.
With a top salary of $101,100, the job pays less than that of a senior bank executive. But the financial community would welcome a replacement from within its ranks. “They’re going to have to get a tougher man,” said one industry analyst. “Kennett was personally smart enough, but he was very trusting. I think he was led down the garden path a few times.” Meanwhile, Finance Minister Michael Wilson also wants to replace Gerald Bouey, the governor of the Bank of Canada, whose second sevenyear term ends next January. Two rumored candidates: Robert Johnstone, consul general in New York, and Grant Reuber, president of the Bank of Montreal. For Canada’s banking fraternity, the replacement of the two top regulators will mark the end of a trusting era.
The story you want is part of the Maclean’s Archives. To access it, log in here or sign up for your free 30-day trial.
Experience anything and everything Maclean's has ever published — over 3,500 issues and 150,000 articles, images and advertisements — since 1905. Browse on your own, or explore our curated collections and timely recommendations.WATCH THIS VIDEO for highlights of everything the Maclean's Archives has to offer.