##butable to unusual weather, but it bears deeper analysis. similarly, on the inflation front, while we have had a couple of months of slightly stronger core inflation, which is reassuring, most analysts are expecting softer inflation data later this week because of a sharp movement in february last year. looking through the short - term volatility, inflation still seems to be running at around 1. 2 per cent, give or take a tenth or two. while we expect growth to approach 2. 5 per cent over the next couple of years, we also see the economy ’ s potential capacity growing at around an average of 2 per cent. this is why we say that it will take a couple of years for us to close our excess capacity gap and get inflation back to near our 2 per cent target. looking beyond that, one would normally expect our economy to grow at its potential, which, as i said, is around 2 per cent, and which is made up of about 1 to 1. 5 per cent growth in productivity and a gradually declining contribution from labour force growth, driven by the demographics story i outlined earlier. accordingly, were it not for our demographic outlook, our growth would converge on a higher trend line. this is the sense in which demographic forces help define our limits to growth. in the broader global economy, however, the possibility of secular stagnation needs to be taken seriously. the combination of low demand, low investment and high savings could be having an impact on what economists refer to as the wicksellian rate, or the equilibrium real rate of interest. there is rigorous theory behind this notion, which i will spare you, but it suggests that interest rates may remain lower than we have experienced in the past for a longer period, until some of these long - term forces dissipate. one specific consequence would be that even extraordinarily low policy interest rates could prove to be less stimulative than in normal circumstances. cause for optimism in the g - 20 meetings held recently in sydney, australia, we recognized that the global economy has not yet returned to strong, sustainable and balanced growth, and that there is limited scope for further stimulus from conventional policies. it was in this context that we underscored the importance of structural reforms to future growth. to make this notion concrete, the g - 20 set out an aspiration to collectively boost global gdp by 2 per cent over the next five years, or about 0. 4 per cent per year in growth terms

obvious during the financial crisis. by global standards, bear stearns was a mid - sized institution. but its significance as a counterparty in the otc derivatives market was such that u. s. authorities were required to assist in a transaction to prevent its complete collapse. to prevent this from happening again, g - 20 leaders have agreed that by the end of 2012, all standardized otc derivatives contracts should be traded on exchanges or electronic trading platforms, where appropriate, and cleared through central counterparties ( ccps ). a great deal of work remains if this goal is to be realized. central counterparties for otc derivatives will provide greater certainty of payment, mitigating the harmful spillovers resulting from the failure of a counterparty, as well as increased transparency, thereby reducing contagion and maintaining continuous markets in times of stress. but ccps also have the potential to create new single points of vulnerability. this calls for the careful design of ccps, as well as robust regulation and supervision. it will also be important to ensure sufficient access to ccps to avoid limiting competition. this is of particular concern in countries that are not host to a large global ccp. there are two potential paths to address these design issues. the first is to promote fair and open access to global ccps with shared oversight arrangements, so that strong, large and mid - tier derivatives market participants have efficient access to central clearing. the second is to build local ccps that are better aligned with local risks and local market conditions. a number of jurisdictions are pursuing the local, or onshore option, including japan, korea, china, hong kong, singapore and brazil. potentially, these local ccps could be linked globally through risk - controlled interoperability. bis central bankers ’ speeches canada is giving serious consideration to an onshore option. this is not to say we are taking the global option off the table, but there are good reasons to consider onshore ccps. going local would give regulatory authorities a high degree of oversight and supervision over systemically important market infrastructure. authorities would also have much more control over the design and implementation of emergency measures, including the provision of emergency liquidity, and influence over a ccp ’ s actions in the event of a member ’ s default. regardless of whether global or local ccps become the path to central clearing, new kinds of interdependencies among jurisdictions will be created. to protect the stability of the financial system, authorities must define shared - oversight