benoit cœure : on the optimal size of the financial sector speech by mr benoit cœure, member of the executive board of the european central bank, at the ecb conference “ the optimal size of the financial sector ”, frankfurt am main, 2 september 2014. * * * i would like to thank alexander popov for his contributions to this speech. i am also grateful to philipp hartmann for his comments. all views expressed here remain mine. ladies and gentlemen, thank you very much for giving me the opportunity to speak here today. the recent global financial crisis has made us rethink the contribution of the financial sector to the real economy. today, i will talk about how our understanding of the finance and growth nexus has changed over the past years, and how policy - makers in europe ‒ in particular, here at the european central bank ( ecb ) ‒ have used this knowledge. introduction in the years prior to the financial crisis, the empirical literature on finance and growth accumulated a substantial body of evidence suggesting that financial sector deepening is a key component of the economic development process. this appeared to be true, both in respect of emerging markets and industrialised economies. 1 encouraged by such evidence, policy - makers did not question the ability of the financial sector to innovate and channel funds to their most socially productive uses. in the words of the federal reserve ’ s then chairman alan greenspan : “ [ … ] our financial system, whose job it is to ensure the productive use of physical capital, has been such a crucial part of our overall economy, especially over the past two decades. it is the signals reflected in financial asset prices, interest rates, and risk spreads that have altered the structure of our output in recent decades towards a different view of what consumers judge as value. ” 2 yet, economies with large, dynamic, and complex financial sectors are not immune to severe macroeconomic contractions. in fact, the banking crises literature provided some evidence on a causal link between rapid credit growth and systemic banking distress long before the emergence of the global financial crisis. 3 furthermore, the output costs of severe banking crises have been found to be of a large magnitude. 4 are these two observations contradictory? not necessarily ‒ both are related to wellunderstood economic mechanisms. on the one hand, mature financial industries ensure the efficient allocation of productive resources, supporting long - term growth. on the other hand, see, e. g., rajan, r., and l

remarks by tiff macklem governor of the bank of canada public policy forum november 10, 2022 toronto, ontario restoring labour market balance and price stability introduction good morning. it ’ s great to be back in toronto to discuss an issue that matters to everyone — the canadian labour market. i ’ m particularly pleased to be on a university campus for a speech that explores the future of workers and jobs. and i want to thank the public policy forum for inviting me to engage with students, researchers and thought leaders on this important issue. my governing council colleagues and i meet with stakeholders of all kinds — business leaders and community groups, unions and students. and everywhere we go, we get many of the same questions. first, people ask about inflation and interest rates. controlling inflation is our top priority, and i ’ ll get into that today. everyone also wants to talk about jobs and the labour market, and three questions regularly come up : why can ’ t businesses find enough workers? are we going into a recession, and does that mean a big rise in the unemployment rate? and what is the bank of canada ’ s role in supporting maximum sustainable employment? so today i want to address these questions. i will tackle them in three parts. first, i want to outline how inflation and the labour market are linked. i ’ ll explain that returning to low and stable inflation is the best way to achieve maximum sustainable employment. our mandate is explicit about that. second, i want to highlight how the canadian labour market was hit by covid - 19, how it recovered and what we expect in the coming months. finally, i want to discuss structural changes in the labour market, such as the aging of the population, that we ’ d be grappling with even if the pandemic hadn ’ t happened. i will discuss what we are watching and what canadian governments and businesses can do to help grow the supply of labour. i would like to thank mikael khan and corinne luu for their help in preparing this speech. not for publication before november 10, 2022 11 : 55 am eastern time our mandate since the bank was founded, its mandate has been to promote the economic and financial welfare of canada. as we said when we renewed our monetary policy framework last december, the government of canada and the bank believe that the best contribution monetary policy can make to the well - being of canadians is to deliver price stability. this is formalized with an inflation target, which is the 2 % mid