the reliance on external credit - rating agencies in the management of the government ’ s assets and liabilities. there is a lot of money at stake. in 2012, the bank managed government of canada daily cash balances averaging about $ 17 billion. we also managed, on behalf of the government, official international reserves amounting to about us $ 69 billion. delivering confidence in our financial system as with any plumbing system, we tend to take notice only when things go wrong. through the crisis and since, the bank ’ s work has meant that the resilience of canada ’ s payment clearing and settlement system has been maintained at a very high level, ensuring that canadians can have confidence that the economy is supported by solid financial market infrastructures. financial stability at home is necessary, of course, but not sufficient. the crisis made it abundantly clear that the global financial system needed remodelling – and the bank of canada has been at the forefront of global reform work. canada has also made good on our g - 20 commitments. among other reforms, we have put in place basel iii capital standards ahead of schedule. we have made significant strides on other market infrastructure reforms, which we can address in detail during our discussion. these are real accomplishments, and our financial system is stronger as a result. but we must not lose momentum, here in canada or on the international stage. more work is required to end the phenomenon of institutions that are too big to fail, including recovery and resolution plans for banks. and countries need to address the issue of shadow banking to bis central bankers ’ speeches ensure that systemically important financial institutions operating outside the perimeter of regulation come broadly into line with their regulated counterparts. delivering confidence in monetary policy finally, confidence is clearly important for the conduct of monetary policy. monetary policy in canada is supported by a governance structure that instills confidence and ensures that canadians, through their government, have a say in setting the monetary policy framework. importantly, the structure also ensures the independence of the central bank to make the right policy decisions to achieve our inflation target. canada ’ s monetary policy framework is a good one. after a tremendous amount of research, canada adopted an inflation - targeting regime in 1991. since 1995, the target has been 2 per cent. we recognized early on that a commitment to hold inflation absolutely steady at 2 per cent was unrealistic. shocks to the economy must be taken into account. so the framework is designed to keep total cpi inflation at the 2 per cent

stephen s poloz : summary of the latest monetary policy report opening statement by mr stephen s poloz, governor of the bank of canada, at the press conference following the release of the monetary policy report, ottawa, ontario, 17 july 2013. * * * good morning. tiff and i are pleased to be here with you today to discuss the july monetary policy report, which the bank published this morning. • global economic growth remains modest, although the pace of economic activity varies significantly across the major economies. • the u. s. economic expansion is proceeding at a moderate pace. the continued strengthening in private demand is being partly offset by the impact of fiscal consolidation. • in japan, fiscal and monetary policy stimulus is contributing to a rapid recovery in economic growth. • in contrast, economic activity in the euro area remains weak. • in china and other emerging market economies, real gdp growth has slowed, although it is stronger than in the advanced economies. this is exerting downward pressure on global commodity prices. • and, as a consequence, the bank has downgraded slightly its global growth forecast. • the global economy is still expected to pick up in 2014 and 2015. • in canada, economic growth is expected to be choppy in the near term, owing to unusual temporary factors. the overall outlook is little changed from the bank ’ s projection in april. • annual gdp growth is projected to average 1. 8 per cent in 2013 and 2. 7 per cent in both 2014 and 2015, supported by very accommodative financial conditions. • despite ongoing competitiveness challenges, exports are projected to gather momentum. this should boost confidence and lead to increasingly solid growth in business investment. the economy will also be supported by continued growth in consumer spending, while further modest declines in residential investment are expected. • growth in real gdp is projected to be sufficient to absorb the current material excess capacity in the economy, closing the output gap around mid - 2015, as projected in april. • inflation has been low in recent months and is expected to remain subdued in the near term. • the weakness in core inflation reflects persistent material excess capacity, heightened competitive pressures on retailers, relatively subdued wage increases, and some temporary sector - specific factors. total cpi inflation has also been restrained by declining mortgage interest costs. • as the economy gradually returns to full capacity and with inflation expectations well - anchored, both core and total cpi inflation are expected to return to 2 per cent around mid - 2015. bis central