institutions that channel funding to commodity - trading activities. while it is possible that the recent trends toward deleveraging are actually diminishing the links between the financial system and commodities markets, this is a development that it will take time to assess. conclusion allow me to conclude. a sound and efficient financial system – both in canada and globally – is essential for developing natural resources for the benefit of all canadians. as i have discussed, the relationship between the financial system and the commodity markets has strengthened over the past couple of decades. however, in the wake of the global financial crisis, new trends have emerged that are associated with the broad trend toward deleveraging by financial institutions. the overall level of commodity prices is driven by supply and demand, particularly the rising demand from emerging - market economies. but financialization may have important implications for the short - term volatility of prices and their co - movements with the prices of other financial assets ; for systemic risk ; and for the channels through which stresses in the financial system can affect the real economy and vice versa. given the importance of commodities to the canadian economy, the bank of canada is monitoring these developments, with a view to safeguarding the economic well - being of all canadians. bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches

stephen s poloz : opening statement before the senate standing committee on banking, trade and commerce opening statement by mr stephen s poloz, governor of the bank of canada, before the senate standing committee on banking, trade and commerce, ottawa, ontario, 20 november 2013. * * * thank you for the opportunity for tiff and me to be with you today to discuss the october monetary policy report, which the bank published recently. the bank aims to communicate our objectives openly and effectively and to stand accountable for our actions before canadians. one of the best ways to do this is through appearances such as this one. allow me to spend a few minutes on the highlights of the report. i ’ d like to flag some important changes that were introduced with this issue. • we have modified the report to explicitly capture the uncertainty that is inherent in our outlook. the goal is to present to canadians a reflection of the evolution of the risks to the inflation outlook that are embedded in our policy, rather than simply compare a snapshot of the current forecast with that of our previous forecast. • the picture is not always perfectly clear, and so we added new measures of ex ante, or before the fact, uncertainty to our five most critical projection variables. we added “ rule of thumb ” ranges around the base - case projection for the growth of canadian and u. s. gdp and for canadian total cpi inflation, as well as for the current level of the output gap and the growth rate of potential output in canada. • with this, we are reminding ourselves – and those who watch us – that economic projections are subject to considerable uncertainty and are revised over time as new economic data become available. • monetary policy formulation is more a process of risk management than one of engineering. in our policy deliberations, we evaluate and assess all of the risks, both positive and negative, and use judgment to determine the balance among them. • as is customary in the october report, we reviewed the forecast for potential output. due to lower - than - expected labour productivity growth in the past year, as well as the delay in the expected pickup in demand for exports and investment, the forecast for potential output growth was revised down slightly. • since the report was published four weeks ago, the outlook for the global and canadian economies has not changed substantially. • let me remind you what we reported : – we expect the global economy to expand modestly in 2013. however, its near - term dynamic has changed, and the composition