markedly on the parent funding ( intra - bank funding will be treated as funding from external third parties and their maturity will have to be extended – netting out at consolidated level is not allowed ). other question is the treatment of liquidity transfer restrictions. excess liquidity in one entity would not be recognized when calculating the consolidated lcr if there is a reasonable doubt about the availability of such liquidity ( due to ring - fencing measures, non - convertibility of domestic currency, foreign exchange controls etc. ). this may lead to fragmentation of the liquidity management, replication of the treasury operations at decentralized level with cost implications. the growth impact of the regulatory changes is of large importance for the emerging markets, as they aim towards financial inclusion, development of financial markets, long - term sustainable growth and real convergence to the more ae ’ s. two of the most important points which have been extensively discussed in the growth context are the regulatory impact on trade and long - term infrastructure finance. trade finance has been considered as the most important facilitator of the trade flows in part of the emerging markets and hence as an important growth factor within this group of countries. some of the estimates point to a figure of 80 – 90 % of the world trade being reliant on some form of trade finance, like trade credits or insurance / guarantees. some of the products like the letters of credit have been widely used in the emerging markets and some of the estimates indicate around 55 % of all letters of credit to be related to export activities, indicating the relative importance of trade financing in export facilitation and growth performances. trade finance is particularly considered to be important for sme, as an easy and chip access to financing, as it is structured and self liquidating. despite the large importance and the low riskiness, the new basel rules treat the trade finance in more conservative way, which might reduce the availability of trade finance, increase its costs and thus impair the export and growth bis central bankers ’ speeches prospects of the emerging markets. albeit some amendments to the basel rules in this area were done in october 2011, still there are views that they are relaxed asymmetrically, only for the importers, and as such they do not bring benefit for the emerging market exporters, where the problems might stem from. longer - term infrastructure finance is also treated as important enhancer of the infrastructure project in the emerging economies, and crucial for enhancement of their structural competitiveness. the reforms of the

. paying close attention to signs that inflation is moving away from our target - in either direction - promotes timely action. this is how we keep the economy operating near its full capacity and thus keep inflation low, stable, and predictable. the second point i want to stress is that having an inflation target as an anchor is very helpful in terms of the bank's accountability. if inflation persistently deviates from the target, we are committed to explaining the reasons why, what we will do to return it to target, and how long we expect the process to take. the third point is that any central bank that runs an independent monetary policy and targets inflation must allow its currency to float. it is simply not possible for a central bank to successfully control both the domestic and external values of its currency at the same time. we have only one instrument - our policy interest rate - so we can have only one target. thus, with inflation as our target, we naturally operate with a floating currency. canada's experience under inflation targeting now, let me quickly review our record with inflation targeting. as we look at inflation and economic growth in canada since 1991, it is quite clear that the benefits we had hoped would come from inflation targeting have, in fact, materialized. we expected inflation to become more stable - and it did so, sooner than we had anticipated. since settling on the 2 per cent target for inflation at the end of 1995, actual inflation has averaged very close to 2 per cent. and it has remained within the 1 to 3 per cent target range, with only rare exceptions. we expected our credibility to increase and inflation expectations to become well anchored - and this has also happened. we also thought that inflation targeting would help the economy to avoid the exaggerated " boom - bust " cycles of previous decades - and it has. the business cycle is still with us, but economic volatility has diminished. by keeping inflation close to the target, monetary policy has helped to keep the economy operating near its potential. finally, and very importantly, our transparent framework has allowed markets and analysts to better predict how we will react to different economic outcomes. within the bank, too, focusing on inflation has brought increased discipline and clarity to our monetary policy decision process. canada was the second country after new zealand to adopt explicit inflation targets. but over the past decade and a half, about 20 other central banks have also adopted this framework. some, like the central banks of the united kingdom and sweden, are from advanced