’ s view on current topics within our sphere of competence. in all this communication, it is the intention of bou to send out various messages to the public on wide ranging issues and events. we for example at periodic intervals, issue papers on the state of the economy. we also issue annual banks supervision reports. it is our expectation that in the near future we shall begin issuing regular reports covering developments in the payment system. i should finally inform you that much as the media and indeed the public have the right to access public information, the nature of our operations sometimes compels us to keep to ourselves some of the information that comes to our knowledge through the execution of our work. banking, by its very nature, revolves around confidentiality. to give a practical example, one can only imagine how one would feel if details of one ’ s personal bank account were to be given out to a third party without the account holder ’ s express permission. likewise, bank of uganda, as banker to government and to commercial banks is bound by the confidentiality and trust that exists between a bank and its customers. most important of all, the central bank as the supervisor and regulator of the financial sector is charged with the responsibility of ensuring that the financial sector is healthy and sound at all times so that depositors ’ funds are safe. the relationship between the financial institutions we supervise and the bank of uganda can, in this regard, only be compared to that of a patient and his or her doctor. reckless disclosure of information about the financial sector can end in disruption and in the end cause a run on a bank. you should be informed that while it takes decades to build and attain depositor confidence in the financial sector, it only takes a wink to get this confidence shattered through irresponsible disclosures. there have, therefore been occasions when we have had thoughtful inactions. in brief, we have had open market operations, open mouth operations and open only eyes and ears operations in regard to threats to financial stability. let me now address myself to what i regard to be the challenges to the media. in assessing the contribution of the media to the financial sector as a public good, i would like to distinguish among at least four types of effects. the first type is characterized as “ the news effect ”, which would normally reflect factual or formal positions or events. in a sense, the media ’ s reporting would be faithful and non - controversial. a second type can be identified as rumour effect. often

in spite of the large amount of excess supply in the economy, core inflation has remained quite close to 2 per cent since the beginning of 2009. this stickiness of core inflation is likely related to the resilience in wage growth relative to the underlying trend in productivity. although wage growth in canada remained high through the recession, it has decelerated in recent months, causing the gap between wage growth and measured productivity to begin to narrow. this slower growth in the cost of labour is a factor that should continue to moderate overall pressures on core consumer price inflation. with wage growth expected to stay at the more moderate levels seen recently, and with excess supply being gradually absorbed, both core and total cpi inflation are expected to return to 2 per cent in the third quarter of 2011. the bank judges that medium - and longerterm inflation expectations remain well anchored to the 2 per cent inflation target. conclusion to conclude, recent events were a watershed. the global economy that emerges from the recession will be different than the one that led into the crisis. a powerful and sustained restructuring of the global economy has begun. canadian business will need to develop new markets as the traditional advantage of relatively open access to u. s. markets becomes less valuable. to seize new opportunities, our productivity levels must improve. in the face of these challenges and the ongoing uncertainties about the global outlook, the credibility of macroeconomic policy is essential. one constant is the bank ’ s unwavering commitment to price stability. the single, most direct contribution that monetary policy can make to sound economic performance is to provide canadians with confidence that their money will retain its purchasing power. that means keeping inflation low, stable, and predictable. price stability lowers uncertainty, minimizes the costs of inflation, reduces the cost of capital, and creates an environment in which households and firms can invest and plan for the future. as expressed in 2009 dollars.