have been seriously affected by the crisis is not given the attention it deserves, simply because they do not have an adequately representative voice on the issues at hand at these international forums. there is no lack of ideas, but they need to be translated into actions sooner rather than later. let me take this opportunity to outline three broad approaches mooted at different forums and supported by us. the first approach involves enhancing the transparency of markets. timely and reliable information relevant to decision making by market participants as well as by the regulatory authorities is crucial to the effective functioning of a market. it is thus important that there should be an adequate public disclosure framework to provide information that is necessary for counter - parties, creditors and investors to assess risks properly. not only should increased transparency be promoted in markets trading products in an established exchange. it is also perhaps time to consider whether some suitable form of transparency requirements should be imposed in otc markets. this is not an easy task, but i believe that with earnest international co - operation, we can achieve meaningful results. although a delicate balancing act is required, i am confident that this is possible without imposing heavy reporting burdens or infringing too much on proprietary information of individual institutions. in this connection, the proposal by germany for an international credit register is attractive. the register could collect information on the exposures of international financial intermediaries to single counterparties that have the potential to create systemic risk. for the public sector, the tasks include developing still higher standards for macroeconomic and financial data in emerging market economies, and promoting transparency in the reporting of their holdings of foreign reserves. greater transparency in the operations of international financial institutions, such as the imf, is also being pursued. the second approach involves designing an appropriate form of oversight of highly leveraged institutions. the basle committee ’ s report on banks ’ interaction with highly leveraged institutions recommends indirect regulation in which banks should adopt more prudent policies on the assessment, measurement and management of their exposure to highly leveraged institutions. other tools of indirect regulation could include the imposition of capital charges on lending to such institutions, raising margin and collateral requirements, and so on. while such indirect regulation, through creditors, should clearly be supported, we need to satisfy ourselves that it is an adequate safeguard against the highly leveraged institutions causing the type of systemic problems in smaller markets when their activities overwhelm these markets. the third approach involves international co - operation to tackle regulatory arbitrage. as industrial and emerging countries

david dodge : monetary policy report update opening statement by mr david dodge, governor of the bank of canada at a press conference following the release of the monetary policy report update, ottawa, ontario, 22 july 2004. * * * today, we released our update to the april monetary policy report. the update reviews economic and financial trends in the context of canada's inflation - control strategy. the bank's outlook for economic growth and inflation in canada is little changed from the april report. let me start with our outlook for inflation. higher - than - expected world oil prices mean that total cpi inflation is likely to remain above 2 per cent through the rest of this year, before falling slightly below core inflation in the second half of 2005. core inflation is projected to remain just above 1. 5 per cent for the rest of 2004, before gradually moving back up to the 2 per cent target by the end of 2005. economic growth in canada should average about 3 ½ per cent through the remainder of 2004 and in the first half of 2005, before easing to 3 per cent in the second half. this would imply average annual growth of about 2 ¾ per cent in 2004 and 3 ½ per cent in 2005. this profile suggests that the canadian economy will reach its production capacity by mid - 2005. as economies approach their production capacity, monetary stimulus must be removed to avoid a buildup of inflation pressures. in canada, the timing and magnitude of interest rate increases will depend on the evolving prospects for inflation and for pressures on capacity. three factors will play an important role in this respect. the first is the assessment of the size of the output gap. the second is the future growth of canadian imports and exports, which is particularly uncertain because of the ongoing adjustments to global changes and the recent patterns in trade growth. the third is the overall effect on the canadian economy of movements in the world prices of oil and non - energy commodities. in addition, there continue to be heightened geopolitical concerns. paul and i will now be happy to take your questions.