or are not sufficiently transparent. i have been impressed by how seriously the private sector has responded to the challenges raised by the events of this year. accounting bodies and regulatory agencies are also seeking ways to improve practices and restore confidence. they are re - examining the role and the responsibilities of external auditors to boards and shareholders – and how these can differ from other duties that auditors are sometimes asked to carry out by management. and they are asking if shareholders and boards have the tools and the power to hold management accountable. it's important that we continue to work on these issues and, moreover, that we are seen to be working on them. we live in a world where impressions matter and where capital markets are increasingly global. canadian issuers will be judged not only against our own standards, but also against the worldwide standards for accounting, disclosure, and governance. at the same time, we must be careful not to impose an overly onerous burden of processes and paper on businesses, particularly on smaller firms, given their importance to the canadian economy. let me be clear : the same principles must apply to all public companies. while all businesses must abide by the spirit of the new standards, it may well be appropriate that larger, more widely held firms should face more detailed requirements than smaller firms whose shares are not as widely held. the challenge of developing an appropriate canadian formula is made more difficult because we do not have a single lead securities regulator, as do the united states, the united kingdom, and australia. i'm not here to argue whether or not canada should have a single lead regulator. the point is we need to improve our current system, and we need to do it now. if we don't, we risk damaging our reputation in world capital markets. in sum, the best way to restore investor confidence is to put in place a system of incentives that encourages managers and boards to always act in the best interests of shareholders. disclosure is key. in every case, shareholders are best protected with full, fair, and accurate disclosure of information. to quote a recent c. d. howe report, " if reforms cannot help investors distinguish good and bad investment prospects, there is no avenue for improving confidence. " this brings me to an important issue for the bank. we have a shared responsibility to promote a sound financial system – together with the department of finance, the office of the superintendent of financial institutions, the canada deposit insurance corporation, as well as provincial and other regulatory bodies. for

inducement for banks to beat their lending benchmark and expand lending beyond their pre - announcement plans. second, banks that as of april 2016 cannot prove that they have beaten their benchmark will be asked to reimburse in advance funds that otherwise could be borrowed for a period of up to 4 years. through these combined effects, we believe that a widespread use of this facility has the potential to halt the vicious circle of constrained lending, weak macroeconomic conditions and elevated loan delinquencies, and re - ignite a positive “ credit multiplier ” process. and in fact the combination of monetary policy measures decided last month already led to a further easing of the monetary policy stance. in particular : • we have seen a marked downward shift in the whole term - structure of the money market. for example, in the overnight segment, eonia fell by 12 bps to 0. 03 % between 4 june and 1 july. over the same period, the 3 - month euribor declined by 10 bps and the 1year 4year ois forward rate declined by 23 bps. • to gauge the overall easing effect of our measures one may go back a bit more in time and look at developments since early may, when the governing council signalled its readiness to act in june. for instance over the period 7 may [ the day before the may gc ] and 1 july the 3 - month euribor declined by 13 bps and 1y4y ois forward rate declined by 36 bps. • since early may we have also seen some compression of liquidity premia [ as for example evidenced by a decline in the spread between kfw bonds and german bund yields with the same residual maturity ] and government bond spreads. the monetary operations to take place over the coming months will add to this accommodation. all measures together should support lending to the real economy, support the economic recovery and – through that avenue – steer inflation rates to levels closer to 2 %. the existence of a “ portfolio balance channel ” has been extensively discussed recently in the context of the fed ’ s large scale asset purchases. there is a vast literature assessing empirically the portfolio balance channel in that context. see, for example, gagnon, joseph, matthew raskin, julie remache and brian sack ( 2011 ), “ the financial market effects of the federal reserve ’ s large - scale asset purchases ”, international journal of central banking 7 ( 1 ), pp. 3 –