steps we've taken since last august to address the concerns covered in the cgfs report ( see summary table ). summary table other central banks have also been working towards the same goals. the cgfs report suggests that central bank actions in response to the market turbulence have been effective in that they have " reduced, though not resolved, " tensions in short - term money markets, thereby mitigating the damage to the economy. however, it has been much more difficult to address funding - market pressures in the broader sense, particularly in term, unsecured markets. the report notes that " the assessment of central banks about their ability to deal with such market pressures depends crucially on the pressures'origins : how much came from liquidity concerns, which are amenable to central bank actions, and how much from counterparty risk or other concerns, which are beyond the reach of central bank operations. overall, the judgment was that tensions would have been more acute and more damaging without the forceful interventions of central banks. " that does not mean that our work in dealing with the broad policy lessons from this period of financial turbulence is done. one important set of issues being studied is how fluctuations in the financial sector play out in the real economy, and how regulations and practices – including the regulation of financial institutions – can dampen or exacerbate these fluctuations. under the umbrella of the financial stability forum, various international committees have been looking at these important issues and are considering a variety of proposals. it is important to reduce procyclicality in the financial system – perhaps including the key aspects of leverage and liquidity – in order to reduce the magnitude of the effects of future financial disturbances. i'd like to turn now to the current state of the markets. the current state of the markets although credit conditions in canada remain challenging, they are better in many respects than those in other major markets. for example, short - term credit spreads, as measured by the spread between short - term lending rates and the expected overnight rate, have narrowed significantly in recent months ( chart 2 : spreads between 3 - month libor and ois ). in large part, the lower short - term credit spreads in canada reflect the healthier state of canadian financial institutions. this relative strength is also shown in the smaller decline in stock market valuations for canadian financial institutions relative to their foreign peers over the past 14 months ( chart 3 : performance of financial sector equities ). nevertheless, there

stephen s poloz : central bank of the year award remarks by mr stephen s poloz, governor of the bank of canada, at the central banking awards 2018, london, 1 march 2018. * * * it is an honour for me to accept the award for central bank of the year on behalf of the staff of the bank of canada. and it is a real pleasure to be here to celebrate the successes and achievements of central bankers from around the globe, such as my good friend lesetja kganyago of south africa. back in january, when central banking announced this award, you published an extensive writeup that detailed the reasons why we were judged to be worthy of it. i am very glad that you did so, because the article illustrates just how important teamwork is at the bank of canada. in that article, every employee in every department can see how their own work contributes to a central bank that is operating at the top of its game. from the model developers, to the currency designers, to the people who got us settled back in our renewed headquarters — everyone contributed to an outstanding body of work with remarkable skill and dedication. so, this award belongs to all the members of our incredible team. i would like to particularly thank central banking for recognizing the work we have done in terms of conducting monetary policy in an era of heightened uncertainty. we have been working on the theme of uncertainty since the global financial crisis revealed the limits of our models and our knowledge. and we have learned that it is far better to be open and honest about the uncertainty we face, as well as how we deal with it, rather than to just assume the uncertainty away and project a false sense of confidence. because profound uncertainties are everywhere, we began talking about monetary policy as an exercise in risk management, as opposed to the precision engineering that many believe the practice of monetary policy to be. to be truly honest about the uncertainties we face, we stopped providing routine forward guidance, which observers and market participants had come to rely on. we took some grief for this decision. but i am certain that the best and most honest approach is to communicate openly about the bank ’ s reaction function, and the key risks we see. this leaves market participants to interpret the data and make their own forecasts about the future path of interest rates. it has taken time, but markets and observers are increasingly adapting to our approach. this experience shows that open communications are vitally important — even more so in a world