##al structure in order to make possible efficient and cost - effective supervision. · supervisors should be in close proximity to those who are to be supervised, and at the same time not under too much political influence. · if regulatory powers are shared among several institutions, there has to be a clear definition of powers and responsibilities. an efficient structuring of the flow of information and of the cooperation between the supervisory bodies involved is also important. · harmonised supervisory rules as well as their consistent application in practice are essential for creating a " level playing field " for the financial institutions in the different sectors. here in the united states, the role played by the federal reserve in financial supervision is not only well recognised but regarded as indispensable. in europe, however, that role is hotly debated. in addition to the above - mentioned general requirements, i would also like to mention some aspects which argue for central banks having a substantial involvement in supervision. · owing to the globalisation of financial markets and the accompanying profound structural changes within individual banking systems, not only microprudential institutional supervision but also looking at the implications for the financial system as a whole are becoming ever more important. · in this context, central banks are particularly affected since a stable financial system is an essential prerequisite of monetary policy. combining the practical supervision of institutions with the analysis of the stability of the financial system as a whole - " the marrying of microand macro - prudential analysis " – as the general secretary of the " bank for international settlements ", andrew crockett, once put it – brings benefits for supervision and monetary policy. effective financial market supervision relies on its own direct access to the relevant information. especially when there is an impending crisis, the key factors are · how quickly crucial information is available to those parties who need it, · how extensive that information is, · that the information is interpreted correctly · and that an appropriate set of instruents for countermeasures is available. for direct access to information, proximity both to the financial markets and to the institutions is an advantage. supervisors, who are active in the markets themselves and know the market participants from their own business relationships, possess major additional sources of information. it is precisely the central banks which maintain these permanent contacts – not only for their monetary policy operations but also because of their role in payment systems. central banks are therefore in a position to identify problems within the financial system earlier than pure bank supervisors are able to. the central

mark carney : monetary policy report opening statement by mr mark carney, governor of the bank of canada, at the press conference following the release of the monetary policy report, ottawa, 22 july 2010. * * * good morning. it is my pleasure to introduce to you tiff macklem, who assumed the post of senior deputy governor of the bank of canada on canada day. we are pleased to be here with you today to discuss the july monetary policy report, which the bank published this morning. the global economic recovery is proceeding but is not yet self - sustaining. a greater emphasis on balance sheet repair by households, banks, and governments in a number of advanced economies is expected to temper the pace of global growth relative to the bank ’ s outlook in april. the policy response to the european sovereign debt crisis has reduced the risk of an adverse outcome and increased the prospect of sustainable long term growth. however, it is also expected to slow the global recovery over the projection horizon. global growth is now projected to average slightly less than 4 per cent through 2012. the u. s. economy continues to recover, but growth is projected to be slightly weaker than anticipated in april. this is owing to the fallout from the sovereign debt crisis in europe and a more protracted recovery in household demand. in canada, the economic recovery is unfolding largely as expected, and is supported by continued fiscal and monetary stimulus, higher terms of trade, improved labour markets, and household confidence, as well as the global recovery. the level of real gdp is now close to its pre - recession peak. the bank expects the pace of growth in canada to moderate to a slightly greater degree than it had expected in april. gdp is now projected to grow 3. 5 per cent in 2010, 2. 9 per cent in 2011, and 2. 2 per cent in 2012. the bank continues to expect consumer spending to slow to a pace more consistent with income growth. business fixed investment has been more subdued than expected and its level is still depressed. going forward, we expect it to increase to levels consistent with previous recoveries, driven by the need to expand capacity and to increase productivity in a more competitive international environment. inflation in canada has been broadly in line with the bank ’ s april projection. both total cpi and core inflation are expected to remain near 2 per cent throughout the projection period. the bank will look through the transitory effects on inflation of changes to provincial indirect taxes. the risks around this projection remain elevated and