to build on. the most obvious is the current economic context, both globally and in canada, as it relates to future sales and financing costs. this context for investment, and global economic prospects more generally, is obviously heavily influenced by developments in the two biggest economies in the world. the trade war that the united states and china are waging is damaging not only their own prospects, but also those of the rest of the world. 3 now, we had been expecting the global economy to slow last year. the us economy was growing at nearly 4 per cent heading into the second half of 2018, well above its non - inflationary speed limit. we knew that the combined effect of interest rate hikes and the fading impact of tax cuts would bring us growth to a more sustainable pace. some other central banks, including the bank of canada, were also taking steps to bring monetary policy settings toward more normal levels. and in china, financial regulations were tightened to slow borrowing and support financial stability. the trade environment, however, has made the global slowdown worse than had been expected. it has undermined business sentiment and held back investment decisions in dozens of economies, including canada ’ s. 4 the slowdown in investment has weighed on global trade as well, as firms put off the spending that is needed to increase their capacity to export. our april forecast estimated that trade uncertainty, including uncertainty with respect to the ratification of the canada - united states - mexico agreement ( cusma ), would cut the level of business investment in canada by about 2. 5 per cent by the end of 2021. we also estimated that it would cut the level of exports by 1. 2 per cent. overall, we said growth in canada will slow to 1. 2 per cent this year from 1. 8 per cent in 2018. slower growth isn ’ t all about trade uncertainty and the global slowdown. this outlook also takes into account the effect of lower oil prices and transportation constraints in energy - intensive regions. growth excluding these energy - related factors would be 0. 3 percentage points higher. the outlook also accounts for the housing slowdown, which has been deeper and more prolonged 3 recent bank of canada research shows that, in the long run, protectionist policies between two countries can have a significantly negative impact on growth in each country — particularly when the policies disrupt trade in production inputs. see y. imura, “ reassessing trade barriers with global value chains, ” bank of canada staff working paper no. 2019

agathe cote : strengthening financial infrastructure – the new canadian central counterparty remarks by ms agathe cote, deputy governor of the bank of canada, to the association of quebec women in finance, montreal, quebec, 14 june 2012 * * * it gives me great pleasure to address the association of quebec women in finance. you are all aware that we are once again in the midst of a period of heightened financial turbulence. this current episode reminds us — if that was necessary — of how important it is to have a robust financial system. today, i will briefly talk about the risks to which canada ’ s financial system is currently exposed. however, my main focus will be on a major step that we have taken to strengthen our financial system against future shocks. i am referring to the new central counterparty service for repo transactions, which was launched on 21 february. this service, operated here in montreal by the canadian derivatives clearing corporation ( cdcc ), is a key initiative designed to improve the infrastructure of canadian core funding markets. recall that our short - term funding markets, like those of many other countries, were severely battered in 2008. these markets are not immune to further turbulence, so it is important that we take measures to increase their resilience. cdcc worked closely with the investment industry association of canada, stakeholders in the financial industry, the bank of canada and other regulatory authorities to create this new central counterparty. however, much remains to be done. it is my hope that, by the time i conclude my comments, you will have a greater understanding of why it is essential that we continue with the next phases of implementation, in which the volume of transactions and the number of participants with access to the counterparty will be expanded. risks presented in the financial system review but first, let ’ s talk about risk. today, the bank of canada is releasing the latest issue of its financial system review, in which it analyzes the principal risks weighing on our country ’ s financial system. i am sure it ’ s not news to you that these risks remain high. after a period of calm earlier this year, global financial conditions have deteriorated markedly in recent weeks as the debt crisis in europe has intensified. markets are skeptical about the capacity and resolve of policy - makers to address unsustainable fiscal situations, the capital adequacy of some euro - area banks and the underlying balance - of - payments problems within the euro area. if these issues are not dealt with in