including of course the bank of canada, the office of the superintendent of financial institutions, and the canada deposit insurance corporation. ultimately, it is the minister of finance who is responsible for the sound stewardship of the financial system. conclusion prudent, conservative policies have provided significant support to canada's housing market, through both good times and bad. this point has been amply demonstrated, during the recent recession – where many countries saw imbalances roil their housing markets – and in the ongoing recovery here in canada. the current revival in our housing sector was a desirable, and intended, part of canada's economic recovery, but like all good things, it must be carefully monitored to ensure that it doesn't go to an extreme. you can be sure that the bank of canada will be closely watching developments in the housing sector and taking them into account in our decisions on monetary policy and in assessing financial stability. in setting interest rates to achieve the inflation target, housing developments need to be weighed along with all the other factors influencing economic activity and inflation. in assessing financial stability, we focus on the potential risks to the whole financial system. in carrying out these responsibilities, we are committed to promoting the economic and financial welfare of canada, by fostering confidence in the value of money, and in the safety and efficiency of our financial system. with that, i wish you a happy and prosperous 2010.

timothy lane : canada's housing sector in recession and recovery – beyond bricks and mortar remarks by mr david wolf, adviser at the bank of canada, on behalf of mr timothy lane, deputy governor of the bank of canada, at the edmonton chartered financial analyst ( cfa ) society, edmonton, 11 january 2010. * * * good afternoon, thank you for inviting me to speak with you today. the beginning of a new year is a good time for reflection – a chance to look back over the past 12 months and consider what may lie ahead. certainly, 2009 saw remarkable economic and financial upheaval around the world, which plunged canada into a severe recession. a global recovery has begun, however, and as we look ahead, we can be confident that this recovery will become more deeply entrenched as the year progresses. today, i will discuss some trends in the canadian economy, focusing on a particularly important sector : housing. the strengthening of the housing market – especially in the resale market – over the past few months has been striking. housing is of considerable interest to the bank of canada, from two perspectives. first, it is important to consider the housing market when formulating monetary policy. the housing sector is a crucial part of the canadian economy, and it typically plays a disproportionate role in economic cycles. housing wealth provides collateral for household borrowing and spending. increases in the cost of housing are an important element in consumer price inflation, and demand for housing is a gauge of household confidence. the housing market is also very sensitive to changes in interest rates, so it can provide an important channel through which monetary policy may influence the economy. second, experience shows that increases and collapses in house prices have been driving forces behind bouts of financial instability in many countries. because the purchase of a home is the most significant reason for household borrowing, housing looms large on the balance sheets of both homeowners and financial institutions. this nexus between financial system stability and the housing sector has been vividly illustrated by the developments in the u. s. housing market over the past two years. the painful correction in the u. s. housing sector was at the root of that country's financial system turmoil that started in august 2007 and then spread around the world, triggering the global recession. canada has been spared such drama, both in this recession and in recent history, and this has drawn much international interest. therefore, it's important to understand the policies affecting the housing market,