either through quasi - fixed exchange rates or with newly introduced capital controls. canada and india are not part of this group. but we are bearing the not insubstantial consequences of a weakened global recovery and the re - emergence of global imbalances. 2 as co - chairs of the framework working group, canada and india are working together to develop concrete and measurable policy commitments to be tabled at the cannes g - 20 summit in november. we have made good progress at the g - 20 table on indicators and guidelines to define significant and harmful economic imbalances. this experience has helped to foster a common understanding of the issues and problems across the g - 20 which, in turn, serves as a first step in achieving greater policy coordination. the working group ’ s focus now is on the key challenges of fostering greater exchange rate flexibility in emerging markets, encouraging deeper and more significant structural reforms, and strengthening the fiscal commitments made in toronto. both co - chairs also believe that there is a symmetry of interests between advanced and emerging economies in reducing the pace of reserve accumulation and are pursuing measurable commitments on this front. achieving consensus projections made by the international monetary fund show that imbalances narrowed from 2008 to mid - 2009, but have been widening ever since and, without policy adjustments, are expected to worsen. bis central bankers ’ speeches on all of these issues will require a shared understanding of the mutual benefits and, here, canada and india have an important role to play. conclusion let me conclude. the g - 20 countries have had considerable success outlining what must be done to enhance the resilience of the global financial system and to achieve stronger, more balanced growth. and the potential achievable benefits of taking collective action are large. the bank of canada conservatively estimates that the average net economic benefit to be gained over time by g - 20 economies from the stronger agreed capital and liquidity standards is 30 per cent of gdp in present - value terms, or about us $ 13 trillion. 3 further, if the g - 20 initiatives to unwind global imbalances are realized, the bank estimates that the level of global demand could be $ 6 trillion to $ 9 trillion dollars higher by 2015 than when compared to a scenario of deficient global demand. 4 but to achieve this promise, the pace of implementation of the g - 20 framework must step up. we are already bearing the consequences of inadequate adjustment. unsustainable macroeconomic policies are increasing uncertainty, under

tiff macklem : the role of the g - 20 in sustaining the recovery and protecting financial stability remarks by mr tiff macklem, senior deputy governor of the bank of canada, at the ficci - iba ( federation of indian chambers of commerce & industry – indian banks ’ association ) conference on “ global banking : paradigm shift ”, mumbai, 24 august 2011. * * * introduction in some respects, canada and india could not be more different. canada is the world ’ s second - largest country in geographic size, with a population of 34 million. india, as one of only two countries with more than a billion people, is the world ’ s second largest in population and is expected to be the largest within 15 years. however, there is much we share, not least, vast and diverse geographies, diversity among our citizens, a common democratic heritage as members of the british commonwealth, and market - based economies. in my remarks today, i will focus on these and other similarities between india and canada, as well as our strong, joint interest – indeed, our leadership role – in the g - 20 reform program to achieve durable financial stability and sustainable and balanced economic growth. my message, in a sentence, is that while the g - 20 has made considerable progress in strengthening the microeconomic rules governing the regulated financial system, we have fallen short in correcting the imbalances that are plaguing the global economy and fuelling financial vulnerabilities. and this is having consequences. the slow progress by some countries in implementing adjustments needed to address macroeconomic imbalances is holding back the global recovery and increasing the risk of financial instability. canada and india are caught in the crosshairs. what can we do? individually, we can ensure our own macroeconomic policies – monetary, fiscal and exchange rate – are sound and supporting necessary adjustments. we can advance the implementation of higher global regulatory standards in our own financial systems. and we can ensure rigorous regulatory supervision of our financial sectors. together, canada and india can provide a strong voice encouraging g - 20 countries to accelerate their efforts to develop and implement concrete, measurable plans to reduce macroeconomic imbalances, address financial vulnerabilities and support a sustainable expansion. canada and india weathered the financial crisis better than most worldwide, the cost of the financial crisis that broke out in 2007 and escalated dramatically in the fall of 2008 has been enormous. the ensuing recession was the worst the world had seen since the 1930s