david dodge : update on economic and monetary developments in canada opening statement by mr david dodge, governor of the bank of canada, before the standing senate committee on banking, trade and commerce, ottawa, 28 march 2001. * * * i appreciate the opportunity to appear before your committee for the first time since my appointment as governor of the bank. on this occasion, i would like to touch on the bank's contribution to good economic performance, our emphasis on openness and transparency, and our role in promoting domestic and global financial stability. i will then comment on the bank's view of current economic conditions and discuss any issues you may wish to raise. the bank of canada has a commitment to contribute to the economic well - being of canadians. this means conducting monetary policy so that it fosters sustained economic growth, by creating conditions favourable to rising investment, employment, and incomes and by bringing about a more stable macroeconomic environment. the unique contribution that the bank can make to good economic performance is to preserve confidence in the future value of money. this means that canadians should be able to go about their business secure in the knowledge that their central bank will do whatever it takes to keep future inflation low, stable, and predictable. the cornerstone of our monetary policy approach is an explicit inflation - control target. the current target range of 1 to 3 per cent, with emphasis on the 2 per cent midpoint, was established jointly by the bank and the government under an agreement that runs until the end of 2001. an announcement regarding a new agreement to extend beyond 2001 will be made well before the end of the year. in a world that is subject to all kinds of shocks and with financial markets increasingly more open and globalized, monetary policy actions stand a better chance of being effective if they are more predictable and better understood by the public. that is why the bank emphasizes transparency and effective two - way communication. in this context, i would like to highlight our latest initiative to improve public understanding of the bank's actions. we have adopted a system of eight fixed dates each year when we announce decisions to change or maintain the bank rate and explain the reasons for our action in a press release. for a market economy like ours to function well, there must be widespread confidence not only that money will retain its value, but also that canada's financial institutions, markets, and infrastructure are sound and efficient. individuals and businesses must be confident that financial claims can be reliably and efficiently created, held, and

also says that, cities outside bangkok are growing at a much faster rate, and some cities such as surat thani have more than doubled its population in ten years. urbanization results in increased purchasing power and fuels domestic demand. more infrastructure investments such as housing, electricity and transportation will be required. this is where the financial sector can contribute and benefit from the development. the trend towards regionalization poses a fourth challenge as well as an opportunity for the banking sector. with the commencement of the aec in 2015, competition will intensify, benefiting those prepared to pursue opportunities across borders. asean as a group has already agreed on its financial integration post - 2015 vision for 2025, and now is in the process of operationalizing it with the milestones and targets to be set in all areas including banking, capital market and, insurance. but this is another topic that i don ’ t think we will have time to cover today. the message that i want to stress is that banks need to plan ahead and invest more to meet these challenges. banks can no longer afford to focus on maximizing short - term returns at the expense of future growth and competitiveness. against this backdrop, you may wonder what ’ s the next milestone of our journey? bearing in mind these challenges, the third financial sector master plan will guide financial developments up to 2020. the milestone for the next stage of our journey, as the title says, is a more competitive, inclusive, connected and sustainable thai banking system. competitiveness, what do we mean when we say we want a more competitive banking system? how can we be more competitive and innovative? if our peers are driving the newest computerized hybrid cars, while we are driving a 10 - yearold car, we will be slower, less safe, and consume more fuel. thus, a possible alternative to keep up with our peers and ensure that traffic flows smoothly is to upgrade our vehicles to the latest reliable technology. likewise, for our banking system to be competitive, each bank should aim to increase its own efficiency. by promoting digitization, both for banks ’ own internal operations and for bis central bankers ’ speeches customers ’ experience, the cost for both parties would be lowered. additionally, we may set up and promote more usage of common utilities such as banknote handling centers or common point of sales ( pos ). from the policy perspective, standards and ecosystem should be developed to ensure compatibility, interoperability, security and confidence. moreover, competition in market