the capacity of the economies to absorb shocks. on the other hand, intensified cross - border financial links also harbour the potential that shocks could be transmitted more rapidly through the euro area. a potentially increased risk of financial contagion alters the challenges to financial stability that we are facing. against this background, the monitoring of progress towards more fully integrated markets – as we are seeking to do with this new set of indicators – is useful for our assessment of the outlook for financial stability. finally, and more generally, financial integration can help to promote the development and modernisation of financial markets, institutions and infrastructures, thereby helping, through various channels, to support economic activity and raise the potential for economic growth. deeper and wider markets encourage savings, offer more and better investment opportunities, reduce the cost of capital and intermediation, and facilitate a more efficient allocation of financial resources. in this way, they contribute to higher growth. it is for this reason that the objective of fostering financial integration in the european union is a key aspect of the lisbon agenda. in fact, financial integration has arguably been one of the most 1 / 3 successful components of the lisbon strategy and further progress towards more integrated financial markets is undoubtedly desirable. the ecb has taken a proactive stance towards, and has been involved in several initiatives aimed at fostering, financial integration, given its importance not only for the performance of the basic tasks of the eurosystem but also for the welfare of european citizens. it goes without saying that we are also in close cooperation with the european commission in our efforts to promote financial integration. the pertinent initiatives of both institutions support and complement each other. regarding the specific fields of activity and expertise of the ecb and the eurosystem, we distinguish between four kinds of contribution. first, public authorities can make a contribution by fostering collective action to overcome possible coordination problems in the private sector. right from the start of monetary union, the ecb has sought to play this “ catalyst role ”. the most recent example in this respect is our support of the initiative for a single euro payments area. second, we provide central banking services that are conducive to financial integration, most prominently by operating europe ’ s leading large - value cross - border payment system, target. third, we offer advice on the legal and regulatory frameworks for the financial system. for example, the eurosystem recently commented on the review of the lamfalussy process1 and on the european

stephen s poloz : opening statement before the standing senate committee on banking, trade and commerce opening statement by mr stephen s poloz, governor of the bank of canada, to the standing senate committee on banking, trade and commerce, ottawa, ontario, 13 april 2017. * * * good morning, mr. chairman and committee members. senior deputy governor wilkins and i are pleased to be back before you today to discuss the bank ’ s monetary policy report ( mpr ), which we published yesterday. at the time of our last appearance in october, i spoke about the factors that caused us to downgrade our outlook for the canadian economy. six months later, i ’ m pleased to say that i can discuss the factors that have led us to upgrade our forecast. for some time, we have been talking about how the oil price shock that began in 2014 set in motion a complex series of adjustments throughout the economy, including a significant restructuring in the oil and gas sector. what we are seeing now is that energy - related activity has stopped declining and is transitioning to a new level that is commensurate with the current level of oil prices. because that large negative force is now essentially past, it is no longer masking the sources of strength that have been at work for some time, particularly the growth in output and employment that is being driven by the service sector. the expansion over the past six months has exceeded our earlier forecasts, and we have revised up our outlook for average annual growth in 2017 to a bit over 2 1 / 2 per cent, one - half percentage point greater than we projected in the january mpr. we project growth of just under 2 per cent in 2018 and 2019. a crucial question for the bank now is whether the stronger economic data that we have been seeing are signalling increasing momentum. some of the strength is coming from factors that are unlikely to continue at the same pace. for example, the very strong growth in consumption in the first quarter was supported by a temporary boost from the canada child benefit. housing activity has also been stronger than expected. while we have incorporated some of this strength in a higher profile for residential investment, we still anticipate slowing over the projection horizon. the current pace of activity in the greater toronto area ( gta ) and parts of the golden horseshoe region is unlikely to be sustainable, given fundamentals. house price growth in the gta has accelerated sharply in recent months, suggesting that speculative forces are at work. in terms of