pierre duguay : the bank of canada ’ s perspective on the penny remarks by mr pierre duguay, deputy governor of the bank of canada, to the senate committee on national finance, ottawa, ontario, 26 may 2010. * * * good evening mr. chairman, honourable senators. i ’ m pleased to have the opportunity to appear before you tonight to provide the bank of canada ’ s perspective on the penny. first, let me take a moment to explain the bank ’ s role regarding canada ’ s currency. we are responsible for supplying canadians with bank notes that they can use with confidence. at year - end 2009, there were 1. 8 billion bank notes in circulation, with a total value of $ 55. 5 billion – approximately $ 1, 630 per canadian. the bank of canada is not responsible for coins. decisions on coinage rest with the federal government, in particular, the department of finance, and with the royal canadian mint. however, coins are an essential adjunct of bank notes to complete cash transactions. so, the bank does have an interest in coins, and we welcome your review of the case for keeping or eliminating the penny. i would like to remind you that cash remains very important to canadians, despite the popularity of alternative payment options. surveys by the bank of canada have found that almost three - quarters of canadians pay with cash at least once a week, compared with 64 per cent for debit cards and 36 per cent for credit cards. 1 these surveys show that cash is the preferred method of payment for purchases under $ 25. ( debit cards are preferred for purchases in the $ 25 to $ 100 range, and credit cards are preferred for purchases greater than $ 100. ) the bank ’ s interest in coins can also be viewed in the context of our responsibility for monetary policy, which is anchored in our commitment to achieve our 2 per cent target for inflation. experience has shown that the best way for monetary policy to contribute to economic performance is by keeping inflation low, stable, and predictable. therefore, the bank views the possible elimination of the penny in terms of the potential impact on inflation, and has conducted some preliminary research on this issue. the findings, which have been made available to other researchers, show that any impact on inflation would be insignificant and more likely non - existent. a common concern is that retailers, who often post prices ending in 9 cents, may round prices up to an even number, absent the penny, and that this would be inflationary

vitor constancio : the future of economic governance in europe in a global perspective speech by mr vitor constancio, vice - president of the european central bank, at the european conference organised by the gulbenkian foundation, paris, 7 december 2010. * 1. * * introduction i am grateful to the gulbenkian foundation for inviting me here tonight. it is a great pleasure for me to be able to address you on the future of economic governance in europe in a global perspective. economic governance is a highly topical issue that is being worked on at this very moment in both policy and academic circles. european and global governance are of course interconnected, and the financial and economic turmoil sweeping over the world economy since 2007 is having fundamental effects on both. accordingly, i will start by highlighting the lessons of the financial crisis for standard economic policy and theory, which will have a substantial impact on our methodologies for understanding the workings of markets and economies. i will refer to the changing paradigms of global governance, including the shift - away from the so - called “ washington consensus ” towards a more inclusive, development - orientated “ seoul consensus ” emerging from the november g20 summit. turning to europe, i will then address the challenges for economic governance as regards economic growth as well as macroeconomic imbalances. i will conclude, after also referring to the ongoing reform of financial regulation, with some observations on the role of europe in global governance and what it means to be european at this point in time. 2. lessons from the crisis for economic policy and theory it is difficult in the time i have available to convey my understanding of the reach and depth of the crisis we have been experiencing. let me, however, provide with you with some key figures. the costs of the crisis, as estimated by andrew haldane of the bank of england, in terms only of permanent loss of output, could amount to between one and five times the total value of present annual world output. 1 the direct support given by governments and central banks to the financial sector have been quantified by the same author as equivalent to 25 % of world gdp, with very heterogeneous percentages in different parts of the world : 30 % in the euro area, 50 % in the united states and a staggering 75 % in the united kingdom. 2 last week, the federal reserve disclosed that it lent usd 3. 3 trillion to various financial institutions, and even hedge funds received usd 71 billion