- 20 commitment to resist trade and financial protectionism. more proactively, it means substantial reforms to build a more resilient, open, global financial system. ultimately, as i will discuss in a moment, securing strong, sustainable, and balanced global growth will also require changes in behaviour and policy adjustments on several fronts. while the recent financial crisis had many causes, its intensity and scope reflected unprecedented disequilibria. large and unsustainable current account imbalances across major economic areas were integral to the buildup of vulnerabilities in many asset markets. in recent years, the international monetary system failed to promote timely and orderly economic adjustment. 14 further postponing adjustment will only serve to increase vulnerabilities. in the past, the frustration of adjustment by current account surplus countries generated deflationary pressures in the rest of the world. similarly, today, the adjustment burden is being shifted to others. some advanced countries – including canada – have recently seen sizable appreciations of their currencies. their ability to increase domestic demand in response is limited. this failure has ample precedents. over the past century, different international monetary regimes have struggled to adjust to structural changes, including the integration of emerging economies into the global economy. in all cases, systemic countries failed to adapt domestic policies in a manner consistent with the monetary system of the day. as a result, adjustment was delayed, vulnerabilities grew, and the reckoning, when it came, was disruptive for all. the net result could be a suboptimal global recovery, in which the adjustment burden in those countries with large imbalances falls largely on domestic prices and wages, rather than on nominal exchange rates. history suggests that this process either could take years, repressing global output and welfare in the interim or lead to another crisis, which would accelerate adjustment, but at a terrible cost. the g - 20 framework could address this issue the g - 20 framework to promote strong, sustainable, and balanced growth in global demand, launched last november in st. andrews, scotland, is an attempt to learn these lessons from history. the g - 20 framework stresses the shared responsibility of countries for global economic performance. under the framework, members have agreed to a mutual assessment of their monetary, exchange rate, fiscal, and financial policies, with the assistance of the international monetary fund ( imf ). the implications of these policies for the level and pattern of global growth and the risks

carolyn wilkins : release of the monetary policy report opening statement by ms carolyn wilkins, senior deputy governor of the bank of canada, at the press conference following the release of the monetary policy report, ottawa, ontario, 13 july 2016. * * * good morning. governor poloz and i are pleased to be here to talk about today ’ s interest rate announcement and our monetary policy report ( mpr ). before turning to your questions, let me spend a few minutes highlighting the main points of discussion that took place within governing council. our bottom line is that the underlying forces that underpin stronger growth in canada are intact, and the adjustment of the economy to lower oil prices is well under way. that said, both international and domestic factors have led us to revise down our forecast for gdp growth. most importantly for canada, there is good underlying momentum in the us economy, even if the composition of us growth is somewhat less favourable for canada than it was in april. we are seeing relatively strong labour market conditions in the united states, consumers are confident, and the rate of new firm creation is back near pre - recession levels. all of this suggests that the weak start to 2016 was largely temporary. the us economy remains a key driver for global growth, which we forecast will strengthen gradually to 3 1 / 2 per cent by 2018. however, the results of the referendum in the united kingdom have clouded the global outlook. governing council carefully considered how best to incorporate the effects of the brexit vote into the outlook. it is early days, and there will be a prolonged period of uncertainty as authorities work out how the united kingdom will exit from the european union. governing council decided to incorporate in the base case projection a 0. 2 per cent reduction in the level of global gdp by the end of 2018. this reflects direct trade effects and some confidence effects on business investment. we are assuming that the brexit process will proceed in an orderly fashion. financial markets were resilient despite sharp adjustments in a wide range of global asset prices in the wake of the vote, and financial conditions are generally more accommodative. now let me turn to the canadian economy. our discussions focused on how we should look through the choppiness in recent data to see the underlying trends, and what these trends mean for the inflation outlook. among other factors, the fires in northern alberta, which have been costly for many, represent a sharp, but temporary, hit to the economy. we expect to