our judgment at this time that the risks around achieving our inflation objective over a reasonable time frame are roughly balanced. accordingly, we believe that the current level of monetary stimulus remains appropriate. some of you may be wondering why we aren ’ t being more specific about the likely future stance of monetary policy. let me answer by saying that forward guidance remains a key element of the policy tool kit – but one that we will reserve for times when we believe there are net benefits to its use. there will no doubt come a day when we will offer forward guidance again – but not this day. and with that, carolyn and i would be pleased to answer your questions. bis central bankers ’ speeches

concentration, and build systemic resilience rather than entrench indispensable institutions. given the frameworks that we had at the time, canada has largely achieved these objectives. given the perspective we have gained from the crisis, there are some promising new avenues to extend this advantage. even though it experienced a short, sharp recession, canada fared relatively well. the cumulative fall in real gdp of 3. 4 per cent in canada compares with declines of over 4 per cent in the united states, 5 per cent in the euro area, and 8 per cent in japan. today, employment and economic activity in canada are back at their pre - crisis levels – a situation unique in the g - 7. canada ’ s better performance during the crisis can be explained by two factors. first, with a highly credible monetary policy and the strongest fiscal position in the g - 7, canadian policymakers were able to respond swiftly and effectively with extraordinarily accommodative measures. second, canada ’ s sound financial system continued to function throughout the period. it was not just that no canadian bank failed or required government capital injections – or that extraordinary liquidity was a fraction of that in other jurisdictions. 1 it was that credit continued to grow throughout the crisis period and into the recovery. 2 the obvious question is, why? in our view, it was the result of a combination of good policy and, in retrospect, some good fortune. allow me to expand. looking back : some lessons from canada higher and better - quality capital risk - based capital adequacy – that is, the amount and quality of capital and the level of risk and leverage – emerged as a key source of strength as the turmoil intensified. canadian banks were required to meet supervisory targets for the level and quality of capital, which more than exceeded international minimums. canadian capital requirements were set at 7 per cent and 10 per cent for tier 1 and total capital ratios instead of the 4 per cent and 8 per cent prescribed in the basel ii capital accords. in practice, canada ’ s banks typically held more. all financial institutions had to establish internal targets to provide an operating cushion against volatility and unexpected losses from inherent risks – and to avoid breaching supervisory targets. capital adequacy depends on a bank ’ s risks – which the basel framework tries to measure. while basel ii had higher risk - weighted assets for riskier businesses, canada ’ s bank supervisor, the office of the