mark carney : opening statement for appearance before the standing senate committee on banking, trade and commerce opening statement by mr mark carney, governor of the bank of canada, to the standing senate committee on banking, trade and commerce, ottawa, ontario, 22 june 2011. * * * good afternoon, mr. chairman and committee members. tiff and i are pleased to appear today to discuss the bank of canada ’ s analyses of the economic outlook and the stability of the financial system. we look forward to your questions and the discussion that follows. the bank ’ s most recent comprehensive assessment of the economy was presented in its april monetary policy report ( mpr ). on 31 may, the bank issued its latest policy rate announcement. these provide the basis for my comments today. please bear in mind that the bank ’ s next full economic analysis will be published in the upcoming mpr, which will be released on 20 july 2011. i will also take a few moments this afternoon to outline the highlights of the bank ’ s financial system review ( fsr ), which was released just this morning. the fsr reviews developments in the financial system and identifies potential vulnerabilities. beginning with the economic outlook : the global recovery is proceeding broadly as we had expected in april. the u. s. economy continues to grow at a modest pace, limited by the consolidation of household balance sheets. growth in europe is maintaining momentum, although the risks related to peripheral economies have clearly increased. the disasters that struck japan in march are severely affecting its economic activity and are also causing temporary supply chain disruptions in advanced economies, including canada. although commodity prices have declined recently, they are expected to remain at elevated levels, supported by tight global supply and very strong demand from emerging markets. these high prices, combined with persistent excess demand conditions in major emerging - market economies, are contributing to broader global inflationary pressures. despite the challenges that weigh on the global outlook, financial conditions remain very stimulative. in the short term, economic growth in canada is expected to slow to modest rates, due to a number of temporary factors. these include the supply chain disruptions that will dampen automotive production, as well as the drag from adjusting to higher energy prices on consumer spending in canada and the united states. overall, a broad rebalancing of demand in canada is underway as the economic expansion progresses. business investment is now growing strongly, and contributions to growth from both household consumption and government spending are dimini

david dodge : how sound economic policies help during uncertain times remarks by mr david dodge, governor of the bank of canada, to the german - canadian business club of berlin - brandenburg berlin, germany, 5 june 2003. * * * it is an honour and a privilege to address the german - canadian business club of berlin - brandenburg at its inaugural meeting. groups such as this one serve many important purposes, not the least of which is the development of trading links that help to strengthen the economies of both our countries. creating and strengthening international trading links has been one of the keys to the success of the canadian economy in recent years. but there is much more to the story. so what i propose to do today is talk about some of the economic policies that canada has put in place in recent years and, in doing so, touch on some of the challenges we still face. canada's monetary policy framework let me start with the policy area for which we at the bank of canada are responsible - monetary policy. the preamble to the bank of canada act calls on us to conduct monetary policy " in the best interests of the economic life of the nation, " and " to promote the economic and financial welfare of canada. " we know that too much demand can lead to inflationary pressures, and that too little demand means that resources are being wasted. so our aim in conducting monetary policy, insofar as monetary policy can influence demand, is to have the economy operating very close to its level of potential output. over time, we have found that the best contribution that monetary policy can make is to try to keep inflation low, stable, and predictable, in order to provide the best setting for strong and sustained economic growth. the question then becomes, what should a central bank target in trying to bring this about? following canada's return to a floating exchange rate system in 1970, the bank of canada tried to achieve a low - inflation environment by targeting the growth of money from 1975 to 1982. but the relationship between money growth and the rate of inflation proved to be unstable. so, in 1991, the bank adopted an explicit inflation - targeting approach. under a joint agreement with the federal government, we aim to keep consumer - price inflation at the 2 per cent midpoint of a 1 to 3 per cent range. if the trend of inflation moves away from the target, the bank will take action to return inflation to the target within 18 to 24 months. our framework is symmetrical. this means that