##217 will add value in terms of the proposed additional financial reporting. we certainly can provide that additional information but, in our view, it is not evident that providing that information would satisfy a cost - benefit analysis. the bank of canada is not a commercial enterprise. our balance sheet is structured to enable us to carry out two main responsibilities : the conduct of monetary policy and activities related to our role as lender of last resort. in terms of revenues and expenses, in 2006, we remitted $ 1. 9 billion to the government through seigniorage. in the same year, our operating expenses were $ 264 million. it is not evident that providing, for example, a cash - flow statement or statement of retained earnings would contribute to meeting the objectives of bill s - 217. in summary, the bank of canada very much supports the objectives of this bill : the promotion of sound financial management, openness, and accountability. as the bill says, " canadian taxpayers need to feel confident that public monies are being managed prudently. " what is not self - evident in the case of the bank of canada, given our mandate, is whether the benefits of providing the additional information outweigh the costs. this bis review is available on the bis website at www. bis. org.

there has been concern about the risks associated with the “ hand - off ” from public demand to private demand. the concern is that if fiscal stimulus runs out before the private sector has gathered sufficient momentum, the global economic recovery could falter. this points to the need for the pace of fiscal austerity to be consistent with continued recovery. so far, i have been focusing on two channels through which excessive sovereign debt at the global level can create risk for the financial system here in canada – more difficult liquidity and funding conditions, and a weaker global economic outlook. these are two of the five areas of risk examined in the current fsr. i would now like to focus on a third, and related, area of risk : global macroeconomic imbalances. global imbalances an important backdrop to the global financial crisis and the ensuing recession was the configuration of large current account imbalances in major economies. these global imbalances were evident in the high levels of savings, and the persistent current account surpluses in china and many asian countries, counterbalanced by the credit - fuelled spending by households and governments, and the large and persistent current account deficits in the united states and some other western economies. these imbalances were not the proximate cause of the crisis, but they contributed to its scope and intensity. in the years leading up to the crisis, high savings rates in surplus countries, together with inflexible exchange rates, helped to keep global interest rates low, encouraging consumers and governments in some advanced economies to take on more debt than was wise. the low interest rates also led to a “ search for yield ”, meaning that investors and financial institutions acquired riskier assets. at the same time, debt was being repackaged in various ways – sometimes into hard - to - understand, and often illiquid, products – and distributed throughout the financial system. many of these products then unravelled – with devastating consequences – during the crisis. global imbalances engendered financial fragility because there were also underlying weaknesses in the financial systems of many countries – including deficiencies in supervision and regulation and inadequate risk management within financial institutions. addressing these underlying weaknesses is one of the principal objectives of the g20 agenda. global imbalances have narrowed significantly during the past couple of years. however, this was largely the temporary effect of the recession and the policies adopted to counter it. in the united states in particular, savings rates have increased as