both the economy and the financial system. these include physical risks from disruptive weather events and transition risks from adapting to a lower - carbon global economy. the bank is incorporating this risk into its analysis of the canadian economy and financial system. we are also working to improve our understanding of climate risks as they relate to our mandate. turning from vulnerabilities to risks, i will conclude by saying the overall risk to the canadian financial system has increased slightly since our last assessment nearly a year ago. this is due to the recent slowdown in economic growth in canada and abroad. however, as we said in our recent monetary policy report, we expect economic growth to pick up later this year. as for the risk of a severe house price correction, we judge that to be moderate and declining, with froth having decreased in the toronto and vancouver areas. meanwhile, the risk of a sharp increase in long - term interest rates driven by higher global risk premiums is moderate, but increasing. with that, senior deputy governor wilkins and i would be happy to answer your questions. 2 / 2 bis central bankers'speeches

analysing the interaction of financial transactions and balance sheets with the behaviour of real variables and asset prices can contribute to economic analysis, drawing on the consistent sectoral framework of the integrated euro area accounts. the challenge remains to underpin and exploit the richness of the accounts by corresponding efforts in terms of modelling. there have been previous attempts at modelling the flow - offunds. on the theoretical side, the sectoral balance sheet approach by tobin ( 1969 ), brainard and tobin ( 1968 ) and others in the late 1960s remains the natural conceptual framework for examining portfolio choice and the interaction with savings behaviour and the real economy. however, attempts to incorporate asset demands and balance sheets into fully - fledged large scale econometric models have faced recurrent set - backs over recent see j. stark “ enhancing the monetary analysis ”, speech at the conference “ the ecb and its watchers ix ”, frankfurt 7 september 2007 ( http : / / www. ecb. europa. eu / press / key / date / 2007 / html / sp070907 _ 1. en. html ). decades. at the same time, a new generation of dsge models could, in principle, also be extended to incorporate the interaction of multiple sectors and portfolio behaviour. on the empirical side, var approaches can be a suitable way to establish stylized facts on how flow - of - funds variables interact with macroeconomic variables in the monetary policy transmission. obviously, diverse financial structures and the impact of financial innovation are likely to affect relationships over time. in terms of the practical use of the accounts, i do see a promising future ahead after the tsunami of the financial crisis. among the broader lesson that we have learned : two pillars are better than one pillar in underpinning a broad - based approach to monetary policymaking. this leaves ample scope for looking at facts and figures, digging deeper into the data jungle. national accounts remind us that a map is needed to put all the data together. further enhancements to the euro area accounts these insights show the wisdom of past efforts to build up monetary union financial accounts ( mufa ) for the euro area and to pursue, jointly with eurostat, the goal of fully fledged integrated euro area accounts. i may also add that this major progress facilitated the comparison of financial and economic developments between the euro area and other economic areas. in particular comparisons with the us and uk, where companies and households have relied more on financing from outside the banking sector, benefited from the availability