keeping their eyes on inflation and have not hesitated to raise policy rates as required. parenthetically, i would add that a number of other developments – developments that did not really contribute to global macroeconomic liquidity – may have left the impression that there was a " wall of liquidity " out there. these developments include the rapid growth, in real terms, of the global economy ; an increase in the ratio of financial assets to gdp ; increases in corporate holdings of cash ; growth in many of the major " real - money accounts, " such as pension funds, central bank reserves, and sovereign wealth funds ; the ongoing reinvestment of fixed - income assets that come to maturity ; and the payouts that occur when firms are acquired. against a backdrop of low real interest rates, much of this money was involved in a " search for yield, " and, in this search, the prices of risky assets were bid up. the situation in canada before august was similar to the global one – that is, it was marked by ample macroeconomic liquidity. indeed, the bank of canada's july monetary policy report update noted that there were upward pressures on inflation, and that the growth of household and business credit, as well as the growth of monetary aggregates, was robust. we therefore raised the policy interest rate to 4. 5 per cent and expressed the view that " some modest further increase in the overnight rate " might be required to bring inflation back to target over the medium term. as for market liquidity, it had generally been growing over the past few years. bid / ask spreads were narrow, and volatility was low in foreign exchange markets and in equity and fixed - income markets. shocks, when they occurred, were contained – that is to say, they didn't spread widely across markets – and episodes of volatility subsided fairly quickly. and shocks did occur. four episodes come to mind : the may 2005 downgrade of ford and gm debt ; the sell - off of risky assets in may and june of 2006 ; the collapse of the american hedge fund, amaranth advisors, in september of 2006 ; and finally, the " flight to quality " in february of this year. these episodes were apt to be costly for those directly affected and reminded investors that investments pose risks, and that prudence requires that these risks be understood and managed. overall, however, because these episodes were well contained and of short duration, they may have left investors too complace

10 % in the absence of pup or wage subsidies. [ 15 ] ibid. almost 80 % of individual take - up of supports is in the bottom half of the earnings distribution. [ 16 ] this re ects several factors, but notably the sector - speci c effects of the pandemic, the concentration of some groups in these sectors – as outlined – and the scale of largely at - rate, non means - tested supports relative to prepandemic earnings. [ 17 ] ibid. [ 18 ] see quarterly national accounts, cso [ 19 ] lydon, r. & t. mcindoe - calder ( 2021 ) “ saving during the pandemic : waiting out the storm ”, economic letter, vol. 2021, no. 4, central bank of ireland. [ 20 ] ibid. not all gross savings ow to deposits. they can be used to repay debt or purchase other nancial assets, or loaned to the government ( post - of ce savings or other government debt ). gross debt repayment did increase in the year to september 2020, by around 8 per cent, accounting for 6 per cent of estimated pandemic savings. [ 21 ] see, for example, recent speech discussion by professor helene rey, at the resolution foundation, monday 8th march, 2021. [ 22 ] the median rst - time buyer deposit in 2019 was €38, 000 ( the mean is higher at €58, 000 ), or €1. 2bn in total. calculated using new mortgage lending data from central bank of ireland. [ 23 ] we know from ssia experience that home improvement spending was a popular use of those savings, quarterly national household survey : ssia module, q4 2005 ( cso ). [ 24 ] lydon, r. & t. mcindoe - calder ( 2021 ) “ saving during the pandemic : waiting out the storm? ”, economic letter, vol. 2021, no. 4, central bank of ireland. [ 25 ] ibid. and fitzgerald, j. ( 2020 ) “ the effects of government policy on personal savings ”, quarterly economic commentary, summer 2020, esri. [ 26 ] in the rst quarterly bulletin for 2021, an unemployment rate of 8 to 9 % was projected over the next two years, up from 5 % pre - pandemic. [ 27 ] lozej, m. & r. lydon ( 2016 ) “ flexibility of new