, to better diversify and manage economic risk. the securitisation of assets made it possible for financial institutions to sell loans within complex and opaque financial products and to take them off their balance sheets. these financial techniques weakened incentives for the prudent screening and monitoring of credit risk and led to banks loosening their lending standards. eventually, when the global financial system was thrown into crisis, many policy - makers were shocked to discover that they did not have the macroprudential tools to deal with part of the financial system spiralling out of control. up until then, the common view in policy circles had been that the whole financial system would be stable as long as its single parts were sound. the financial crisis painfully demonstrated how supervisory arrangements have not been sufficiently focused on ensuring the stability of the financial system as a whole. therefore, to be able to monitor, assess and mitigate systemic risk, policy - makers have been working on creating new tools for a new policy area, namely giving a macro - prudential orientation to financial regulation and supervision. the european systemic risk board ( esrb ) was established as the main body for macroprudential oversight and surveillance of eu financial markets. bis central bankers ’ speeches as you probably know, the european central bank ( ecb ) has close links with the esrb. these include, first, a personal link : the president of the ecb also serves as the chairperson of the esrb. second, the ecb provides logistical and administrative support by hosting the esrb secretariat. and lastly, the ecb provides analytical and statistical support, collecting and processing information that feed into the esrb ’ s discussions. despite this, however, the esrb remains a body that is quite distinct and separate from the ecb. the esrb does not change in any way the functioning of the ecb ’ s statutory role and its unambiguous primary mandate for delivering price stability. the new institutional set - up, and the ecb ’ s role in it, rests on solid institutional and legal foundations. the ecb has participated closely and constructively in the legislative process leading to the establishment of the esrb. it has thus focused on establishing in europe the most effective and robust macro - prudential supervision set - up possible to prevent and mitigate systemic risk. the question remains, however, as to whether, within this new macro - prudential framework, there might not be some tension between inter - connectedness born out of

tiff macklem : release of the monetary policy report opening statement by mr tiff macklem, governor of the bank of canada, at the press conference following the release of the monetary policy report, ottawa, ontario, 24 january 2024. * * * good morning. i'm pleased to be here with senior deputy governor carolyn rogers to discuss today's policy announcement and the bank of canada's monetary policy report ( mpr ). today, we maintained our policy interest rate at 5 %. we are also continuing our policy of quantitative tightening. our message today is twofold. first, monetary policy is working to relieve price pressures, and we need to stay the course. inflation is coming down as higher interest rates restrain demand in the economy. but inflation is still too high, and underlying inflationary pressures persist. we need to give these higher rates time to do their work. second, with overall demand in the economy no longer running ahead of supply, governing council's discussion of monetary policy is shifting from whether our policy rate is restrictive enough to restore price stability, to how long it needs to stay at the current level. let me give you some economic context for these considerations and talk about the implications for monetary policy. global growth has slowed, but not quite as much as we thought it would, largely because of the surprising resilience of the us economy. inflation is easing in most major economies, but it remains too high and is not expected to reach central banks'targets until 2025. in canada, economic growth stalled in the middle of 2023. for many canadians, the combination of higher prices and higher interest rates has been difficult. but past interest rate increases have helped the economy rebalance, and this is relieving price pressures. lower energy prices and improvements in global supply chains have also helped to bring inflation down. growth is expected to remain flat in the near term. with weak demand in the economy, upward pressure on prices should continue to moderate, and inflation is expected to ease further. the share of consumer price index ( cpi ) components that are rising faster than 3 % has declined substantially and should continue to normalize. but tightness in some parts of the economy is continuing to hold inflation up. the most prominent of these is housing. inflation in shelter services remains high - close to 7 % because of rising mortgage interest costs, higher rents and other housing costs. and while food prices are not increasing as fast as they were, food inflation is still