mark carney : summary of the latest monetary policy report opening statement by mr mark carney, governor of the bank of canada, at the press conference following the release of the monetary policy report, ottawa, 26 october 2011. * * * good morning. tiff and i are pleased to be here with you today to discuss the october monetary policy report, which the bank published this morning. the global economy has slowed markedly as several downside risks to the projection outlined in the bank ’ s july mpr have been realized. volatility has increased and there has been a generalized retrenchment from risk - taking across markets. the combination of ongoing deleveraging by banks and households, increased fiscal austerity and declining confidence is expected to restrain growth across the advanced economies. the bank now expects that the euro area – where these dynamics are most acute – will experience a brief recession. the bank ’ s base - case scenario nonetheless assumes that the euro - area crisis will be contained, although this assumption is clearly subject to downside risks. in the united states, real gdp growth is expected to be weak through the first half of 2012, reflecting diminished household confidence, tighter financial conditions and increased fiscal drag. growth in china and other emerging - market economies is projected to moderate to a more sustainable pace. these developments, combined with recent declines in commodity prices, are expected to dampen global inflationary pressures. the outlook for the canadian economy has weakened since july, with the significantly less favourable external environment affecting canada through financial, confidence and trade channels. although canadian growth rebounded in the third quarter with the unwinding of temporary factors, underlying economic momentum has slowed and is expected to remain modest through the middle of next year. domestic demand is expected to remain the principal driver of growth over the projection horizon. household expenditures are now projected to grow relatively modestly as lower commodity prices and heightened volatility in financial markets weigh on the incomes, wealth and confidence of canadian households. business fixed investment is still expected to grow solidly in response to very stimulative financial conditions and heightened competitive pressures, although it will be dampened by the weaker and more uncertain global economic environment. net exports are expected to remain a source of weakness, owing to sluggish foreign demand and ongoing competitiveness challenges, including the persistent strength of the canadian dollar. overall, the bank expects that growth in canada will be slow through mid - 2012 before picking up as the global economic environment improves, uncertainty dissi

is most effective when the policy objective is clearly understood and accepted. when consumers and savers, business owners, and financial market players, all understand the bank of canada's policy objective – and believe that it is attainable – then they can make better long - term plans and decisions. and when everyone expects this target to be maintained, and acts accordingly, then the target becomes self - reinforcing. but the benefits of transparency don't stop there. i believe that transparency also helps us to make better decisions. the extra rigour that comes from holding the rationale behind our decisions up to external scrutiny leads to better results. finally, the bank of canada is a public institution – funded by, and accountable to, the taxpayer. information and analysis gathered in the context of the bank's business should be considered a public good – except when the release of such information would compromise the implementation of the bank's mandate. are there limits to transparency? in general, more transparency is better than less. but this does not mean that there are no limits. first, there is the need to protect the confidentiality of some information and analysis that is given to the bank by outside parties, be they public - or private - sector institutions. indeed, public release of third - party, confidential information would jeopardize the central bank's ability to get all the information it needs to make good monetary policy decisions. second, there is the need to protect the integrity of some internal policy deliberations. for example, the public release of policy advice and recommendations could stifle the free debate and consensus building that is necessary for sound policy - making. we want to hear all aspects of an argument, but it could be hard for staff members to play devil's advocate, knowing that such a position will be made public and could be taken out of context. and certain information should not be released while policy is still being developed, or has not yet had its full effect. in such cases, premature transparency could lead to misinterpretation or be acted on inappropriately, which could derail good policy intentions and could potentially be damaging to canada's economic interests. third, there is the need for good quality information. providing useful, relevant information is far more important than dumping a large quantity of information of questionable quality. too much information can actually cloud what is important. as a result, actions and decisions can become less transparent, because the really important, effective, and