we strive to improve the regulatory framework going forward. i want to emphasize that these principles, as in the case of many principles, are easier to state than to achieve. let me start by acknowledging there are aspects of the exacting standards we have sought to impose on our financial system that have turned out to be expensive in relation to the return against our public policy objective. and provisions that seem optimally designed at any given time are likely to need to evolve as conditions change. that this should occur is a natural aspect of a dynamic financial environment. there are areas where we are likely to have erred in being too prescriptive and others where we left too much room for discretion and judgment. it would be good if we could find a way to build into the initial design of guidance and regulation the capacity for quicker and continuous evolution as we learn more. second, we need to continue to adapt our approach to the imperatives of a much more integrated global financial system. global integration, of course, gives us all a greater stake in the quality of supervision outside our borders. this pragmatic interest will lead us to spend progressively more resources and attention on the international dimension of our work. this recognition informed the efforts that led to the basel capital accord, the lamfalussy standards for payment and settlement systems and many other international cooperative efforts. but the imperative is much stronger today because of the much greater extent of financial integration, and it is only likely to grow. it is also important that the design of regulatory initiatives in the united states be informed by a careful assessment of their relative impact on u. s. institutions and markets. effective solutions to many of the concerns we face in our national financial systems will require multilateral approaches. rather than starting with a presumption that we will act in the united states and then hope to induce the world to follow, there are some areas where the more effective approach will be to start with the borderless solution by which i mean one designed to apply to a class of institutions and financial instruments, independent of geography and currency. where this does not prove possible on terms or in a time frame we like, we of course preserve the option to move alone. third, we live in a financial system in which nonbank financial institutions play a much larger role than they did in the past, a system in which the differences between the activities of the bank - centered financial institutions and nonbanks has diminished, and in which the largest commercial banks and investment banks compete

remarks by rhys mendes deputy governor greater charlottetown area chamber of commerce november 26, 2024 charlottetown, pei sticking the landing : keeping inflation at 2 % introduction good morning, it ’ s wonderful to be here in charlottetown today to give my first public speech as a deputy governor at the bank of canada. i ’ m delighted not only to visit prince edward island but also to learn more about the local economy. to do our job well at the bank, we need to understand how our policies affect people and businesses across this vast country. that ’ s why i ’ m meeting with business and community leaders from several sectors while i ’ m here. our job at the bank is to keep inflation low and stable, so we aim to keep it centred on a 2 % target. this is how we ensure the economy works best for all canadians. inflation has now come down significantly and is back at 2 %. we want it to stay there. for this reason, we decided last month to lower our policy interest rate by 50 basis points to 3. 75 %. our focus now is on ensuring that inflation remains low, stable and predictable. we need to stick the landing. the past few years have been difficult for canadians. the covid - 19 pandemic caused the sharpest economic downturn in a century, which was followed by an unexpectedly fast rebound. inflation surged to a four - decade high, and the bank responded by increasing interest rates to levels not seen since the early 2000s. we did what we believed was necessary to restore price stability. and it worked : inflation has returned to 2 %, and interest rates have started to come down. but it hasn ’ t been painless. higher interest rates were a burden for families and businesses. inflation is back to normal, but it may not feel that way for many people. especially if they are facing higher interest payments on their mortgages or other loans. with all of this in mind, the bank owes it to canadians to assess how effective our interest rate decisions were in countering high inflation. i ’ ll begin by discussing the factors that led to the run - up in inflation, and i ’ ll explain how monetary policy worked to address them. my aim is to shed some light on the question of whether higher interest i would like to thank justin - damien guenette, oleksiy kryvtsov and konrad zmitrowicz for their help in preparing this speech. not for publication until 08 : 05am eastern