if additional stimulus were to become necessary, the bank retains considerable flexibility in the conduct of monetary policy at low interest rates. • because it is important to outline those alternatives in a principled and transparent fashion, we published today a framework that describes the bank's approach to the conduct of monetary policy when the overnight interest rate is at its effective lower bound. • additional stimulus could be provided through quantitative easing, which involves the creation of central bank reserves to purchase financial assets and / or credit easing, which includes outright purchases of private sector assets. • if the bank were to deploy either quantitative easing or credit easing, it would act in a deliberate and principled fashion. - the focus of these operations would be to improve overall financial conditions in order to support aggregate demand and achieve the inflation target. - asset purchases would be concentrated in maturity ranges in order to have the maximum impact on the economy. - actions would be taken in as broad and neutral manner as possible. - the bank would act prudently, mitigating the risks to its balance sheet and managing its ultimate exit from such strategies at an appropriately measured pace. • allow me to conclude with a few words on the outlook for the canadian economy. • while there remains a high degree of uncertainty – particularly with the canadian economy dependent on forces beyond our borders – we remain confident in the prospects of economic recovery in canada. • this recovery should be supported by the following factors : • - the gradual rebound in external demand ; - the end of the stock adjustments in canadian and u. s. residential housing ; - the strength of canadian household, business, and bank balance sheets ; - our relatively well - functioning financial system and the gradual improvement in financial conditions in canada ; - the past depreciation of the canadian dollar ; - stimulative fiscal policy measures ; - the timeliness and scale of the bank's monetary policy response. in short, we have a plan to restore confidence and growth, we are implementing this plan, and it will work. with that, paul and i would be pleased to take your questions.

backed commercial paper is a somewhat different story. because this short - term paper must be redeemable at maturity, despite the longer - term assets that back it, it must carry a guarantee from a liquidity provider. so, there is a question of how liquidity providers should take into account the potential for liquidity calls to be made, both in terms of the capital they hold against this potential, and the liquidity of the assets on their balance sheet. this issue, which came to the fore this summer, represents a key challenge for the members of the iif. how do you make provisions for liquidity calls that may come against the guarantees that your institutions provide, and for the support of products that represent a reputational risk should they fail? these are not easy questions to answer, but it is important that you provide your own answers and be prepared to discuss them with your regulator in the context of the implementation of basel ii. and i am pleased to see that the iif has been working hard on these particular issues. finally, this summer's turbulence has raised a number of system - wide issues related to liquidity. in the event of a serious disruption in securities markets that would threaten financial stability, are there policies that would be helpful? the financial stability forum has been looking at this issue. and of course it is not only commercial banks that need to worry about this, it is also a problem for central banks in their role as the ultimate providers of liquidity to the banking system. over the summer, central banks have seen that their standing liquidity facilities have worked quite well with respect to the market for overnight funds. different central banks have different practices and facilities in place to provide liquidity to the banking sector. in canada, we have clear rules for accessing our standing liquidity facility to cover routine overnight liquidity needs. and we have clear rules regarding emergency lending assistance for individual solvent banks with acute liquidity problems. but are there principles that would suggest that some market failures would be best dealt with if we had a readily accessible facility that would provide liquidity to banks at terms longer than overnight, collateralized with a possibly wider range of securities? such a facility would have to allow for suitable term premiums and penalties. the types of market failure that such a facility would be designed to deal with would obviously need to be thoroughly examined and discussed, as would the pros and cons of any specific proposal, including a consideration of all other issues that might be