and has played an active part in these times in three capacities : as an eminent scholar in monetary economics, as a leading commercial banker and as a highly influential monetary policymaker and from my own experience i can assure you that being a commercial banker and a policymaker are – and should be – two very different experiences. alexandre lamfalussy was born 85 years ago – in 1929 – in kapuvar, hungary. in 1949, when the iron curtain isolated hungary and many other central european countries from the rest of europe, he managed to emigrate to belgium, where he studied economics at the catholic university of louvain ; he obtained his phd from the university of oxford. it is quite fascinating to see that lamfalussy developed his strong pro - european conviction already during these formative years, no doubt also because he personally experienced the barriers which divided europe. and he found friends who shared his conviction and his values. let me give you a small, but interesting example of lamfalussy ’ s convictions : he became a member of “ la releve ”, which was both a political club and a weekly magazine close to the left wing of the belgian christian democrat party. it is noteworthy that the keynote speaker at the 30th anniversary of la releve in 1975 was jacques delors ( maes, 2011, p. 17 ). when i was vice president of the european investment bank ( eib ) in luxembourg, i had the good fortune to gain an understanding of this set of ideas from my good friend philippe maystadt, the president of the eib and the former belgian minister of finance. bis central bankers ’ speeches alexandre lamfalussy then worked for the commercial bank banque de bruxelles for 20 years, where he became a member of the executive board. already during this time, lamfalussy was active in a number of committees investigating the integration of european capital markets. in 1976, alexandre lamfalussy underwent a major career change and went to the bank for international settlements, the bis, in basel, first gaining great respect as chief economist and from 1985 serving as the general manager of the bis. during this time, he became one of the leading figures in the preparatory work for european financial integration. lamfalussy was a member of the delors committee, which played a central role in the preparation of the maastricht treaty and emu. thus he was the obvious choice to become the first president of the european monetary institute

also appears to be playing a role in the appreciation of the canadian dollar. to the extent that the type one appreciation is working to offset the underlying positive shock to the canadian economy, there is less need for monetary policy to respond. but the type two appreciation is something that monetary policy would want to respond to in the form of a lower policy interest rate than would otherwise be the case. our assessment is that most of the exchange rate appreciation since 2003 reflects strong global demand and higher commodity prices. at the same time, part of the canadian dollar appreciation has been related to the multilateral depreciation of the u. s. dollar, and we have had to factor this type two force into our monetary policy decision making. weighing all factors, the bank of canada has raised the policy interest rate from 2 1 / 2 per cent to 4 1 / 4 per cent, as unused capacity in the canadian economy has been absorbed by strong foreign and domestic demand for canadian goods and services. our objective with these rate moves has been to keep the canadian economy operating at its potential and inflation close to the 2 per cent target over the medium term. policy interest rates in the united states, by comparison, have increased from 1 per cent to 5 per cent. as a result, while the canadian and the u. s. economies both appear to be operating close to their full production capacity, interest rates in canada are below those in the united states right across the yield curve. and, at longer maturities, the negative spreads with u. s. rates are historically large. as i said earlier, interpreting currency movements is difficult and requires judgment. the challenge is even more acute during periods of market volatility, such as we've seen in recent weeks. the challenges of a rapid currency appreciation at this point, i'd like to make one thing very clear : for many individuals and firms, adjusting to exchange rate changes can be difficult — particularly when the currency moves as far and as quickly as it has in the past three years. while higher commodity prices benefit some firms, others are facing higher energy and non - energy input costs, and new competition from low - cost producers in china and elsewhere. for these firms, the higher value of the canadian dollar is an added pressure. some sectors, particularly manufacturing, tourism, the fishery, and forestry, are facing some very real challenges. and some firms, especially in the manufacturing sector, are struggling, and individuals have lost jobs. we are well aware of this