mark carney : summary of the latest monetary policy report opening statement by mr mark carney, governor of the bank of canada and chairman of the financial stability board, at the press conference following the release of the monetary policy report, ottawa, 18 july 2012. * * * good morning. tiff and i are pleased to be here with you today to discuss the july monetary policy report, which the bank published this morning. global growth prospects have weakened since the bank released its april mpr. the economic expansion in the united states continues at a gradual but somewhat slower pace, while developments in europe point to a renewed contraction. in china and other emerging economies, the deceleration in growth has been greater than anticipated, reflecting past policy tightening and weaker external demand. this slowdown in global activity has led to a sizeable reduction in commodity prices, although they remain elevated. the combination of increasing global excess capacity over the projection horizon and reduced commodity prices is expected to moderate global inflationary pressures. global financial conditions have also deteriorated since april, with periods of considerable volatility. while global headwinds are restraining canadian economic activity, domestic factors are expected to support moderate growth in canada. the bank expects the economy to grow at a pace roughly in line with its production potential in the near term, before picking up through 2013. consumption and business investment are expected to be the primary drivers of growth, reflecting very stimulative domestic financial conditions. however, their pace will be influenced by external headwinds, notably the effects of lower commodity prices on canadian incomes and wealth, as well as by record - high household debt. housing activity is expected to slow from record levels. government spending is not projected to contribute to growth in 2012. it is expected to contribute only modestly thereafter, in line with plans to consolidate spending by federal and provincial governments. canadian exports are projected to remain below their pre - recession peak until the beginning of 2014. this reflects the dynamics of foreign demand and ongoing competitiveness challenges, including the persistent strength of the canadian dollar. the bank projects that the economy will grow by 2. 1 per cent in 2012, 2. 3 per cent in 2013 and 2. 5 per cent in 2014. the economy is expected to reach full capacity in the second half of 2013, thus operating with a small amount of slack for somewhat longer than previously anticipated. core inflation is forecast to remain around 2 per cent over the projection horizon as the economy operates near its production potential, growth in labour

totalling chf 90 billion in the first half of this year. on a trade - weighted basis, the swiss franc has strengthened some 5 % in real terms since the beginning of 2020. had we not intervened, the franc would have appreciated significantly more, and this would have placed an additional burden on our economy in an already exceptionally challenging environment. page 2 / 5 zurich, 17 december 2020 andrea m. maechler news conference final sprint in transition to saron let me now say a few words about the changeover from swiss franc libor to saron. the end of swiss franc libor is fast approaching. in november, the libor administrator launched a consultation procedure on the discontinuation of swiss franc libor as per end - 2021. market participants in switzerland may therefore only have around 12 months to complete the necessary work for a smooth transition to saron. only the heavily used tenors of us libor are expected to be granted an extension until mid - 2023. however, this will not affect the swiss franc libor i have been focusing on in my remarks. in order to ensure an orderly transition, it is vital that the changeover to saron on the credit and derivatives markets occur as early as possible. the supply of saron - based products on the credit market is increasing. for example, various banks have launched saron - based mortgages in recent months. however, the saron - based derivatives market is still significantly less liquid than its liborbased counterpart – turnover on the saron - based derivatives market remains considerably lower than turnover on the libor - based market ( cf. chart 4 ). as we do not have a consistently liquid government bond curve in switzerland, the interest rate swap curve is very important as a reference for pricing fixed - interest loans and bonds. with the discontinuation of swiss franc libor, this critical reference function will be performed by the saron - based interest rate swap curve. it is important that libor - based contracts that cannot be switched to saron before the end of 2021 are furnished with robust fallback clauses. the international swaps and derivatives association ( isda ) has recently published such fallback clauses for derivatives contracts. robust fallback clauses minimise the risks associated with the discontinuation of swiss franc libor, thereby providing a safety net. the snb itself continues to make progress with the changeover to saron – we will have