by more than the bank had expected, with more muted price pressures across a wide range of goods and services, consistent with the unexpected increase in excess capacity. bis central bankers ’ speeches • total cpi inflation has also been lower than anticipated, reflecting developments in core inflation and weaker - than - projected gasoline prices. • total cpi inflation is expected to remain around 1 per cent in the near term. it is expected to rise gradually, along with core inflation, to the 2 per cent target in the second half of 2014 as the economy returns to full capacity and inflation expectations remain well - anchored. • despite the reduction in global tail risks as a result of a series of actions by european and american authorities, the inflation outlook in canada is still subject to significant risks. • the three main upside risks to inflation in canada relate to the possibility of stronger - than - expected growth in the u. s. economy, higher canadian exports and renewed momentum in canadian residential investment. • the three main downside risks to inflation in canada relate to the european crisis, more protracted weakness in business investment and exports in canada, and the possibility that growth in canadian household spending could be weaker. • overall, the bank judges that the risks to the inflation outlook in canada are roughly balanced over the projection period. • reflecting all of these factors, the bank today maintained the target for the overnight rate at 1 per cent. • while some modest withdrawal of monetary policy stimulus will likely be required over time, consistent with achieving the 2 per cent inflation target, the more muted inflation outlook and the beginnings of a more constructive evolution of imbalances in the household sector suggest that the timing of any such withdrawal is less imminent than previously anticipated. with that, tiff and i would be pleased to take your questions. bis central bankers ’ speeches

mark carney : some current issues in financial reform remarks by mr mark carney, governor of the bank of canada, to the institute of international finance, washington dc, 25 september 2011. * * * thank you for the invitation to speak today. in the hope of addressing some of your concerns, i waded through the more than 1, 000 pages of reports and notes that the institute of international finance ( iif ) has produced over the past year. your messages have been consistent, if not always concise, so i would like to focus on three particular concerns about the financial reform agenda you have recently expressed : 1. the consistency in implementation across jurisdictions ; 2. the possibility of substantial regulatory arbitrage in the shadow banking system ; and 3. the macroeconomic impact of the reforms. before i do, allow me a general observation. the g - 20 is undertaking a radical and comprehensive program to strengthen the regulation, supervision and infrastructure of the global financial system. its ambition can hardly be a surprise. four years ago, manifest deficiencies in capital adequacy, liquidity buffers and risk management led to the collapse of some of the most storied names in finance and triggered the worst financial crisis since the great depression. the complete loss of confidence in private finance – your membership – could only be arrested by the provision of comprehensive backstops by the richest economies in the world. with about $ 4 trillion in output and almost 28 million jobs lost in the ensuing recession, the case for reform was clear then and remains so today. let me now turn to your issues. consistency in implementation authorities are increasingly hearing concerns about the pitch of the playing field for basel iii implementation. everyone is claiming to be a boy scout while accusing others of juvenile delinquency. however, neither merit badges nor detentions will be self - selected but, rather, determined by impartial peer review and mutual oversight. it is important to remember that the basel rules have always been, and continue to be, international minimums, rather than a “ one - size - fits - all ” approach. there are legitimate reasons why implementation may differ across countries. some countries will implement basel iii faster than others. the current transition period to 2019 for basel iii has been variously described as enlightened, leisurely and generous. it reflects a lowest - common - denominator compromise that gives the time needed to rebuild capital buffers in those crisis economies that are furthest from compliance. some countries may