The Bank of Canada has named its successor to current governor Gordon Thiessen: It's David Dodge, the deputy health minister.

Dodge, 57, will succeed Thiessen who is due to retire at the end of January. He's the first outsider to be appointed to the prestigious post.

In accepting his new job, Dodge praised his predecessor. Under Gordon's leadership, a number of innovations have been made, said Dodge. One of the key ones has been the formation of a governing council to guide the formulation of monetary policy and I look forward to working with my colleagues on that governing council in this, the first decade of a new century.

Dodge has been with the health ministry since 1998. Before that, he served for five years as deputy minister under Finance Minister Paul Martin, who has the final say in choosing the new governor. Dodge has a doctorate of economics from Princeton University.

The bank's new governor brings to his role distinguished academic credentials and an exemplary record of fruitful public service to Canada, said Bank of Canada director Harold MacKay in announcing Dodge's term.

One of Dodge's biggest jobs will be to establish the bank's trend-setting interest rate. The Bank of Canada adjusts interest rates with the aim of controlling inflation.

The Bank of Canada was rumoured to be favouring the appointment of senior deputy governor Malcolm Knight. However, a source told Reuters that until almost the last moment Knight was the favorite for the job. Then something happened and he got blown away.

The governor of the Bank of Canada performs the same role as the president of a corporation. He or she is the bank's chief executive officer, and has control and full authority over the business of the bank.

A 12-member committee of Bank of Canada directors is responsible for picking the governor. The governor is appointed for a term of seven years. He cannot be relieved of his or her duties at the whim of the government. Governor Thiessen's current salary range is $209,900 to $314,700.