the most recent figures are approaching 3 per cent annual growth, which is back to pre - crisis levels. if i am right, the us economy is due for another period of better bis central bankers ’ speeches productivity growth, and i have every reason to think that canada will follow once we work through our adjustment to lower resource prices. a reversal of the cyclical slowdown in investment i mentioned earlier would also serve to support future productivity growth. a second reason for optimism about productivity is that even if most major economies have exploited most available opportunities for integration, gains may still be had from improvements to existing supply chains. economies evolve over time, and comparative advantages are not set in stone. consider china, which for years was the main destination for outsourced production. today, its working - age population is shrinking. unit labour costs have been rising quickly as the economy moves up the value chain. now, we ’ re seeing signs that labour - intensive production is shifting out of china and into nearby economies, such as cambodia and vietnam. all of this suggests that companies and investors may be able to find ways to improve the efficiency of supply chains in many geographic areas. this will show up as a new wave of integration and global trade growth. for policy - makers, of course, this means we should be working to help initiatives such as the trans - pacific partnership and the comprehensive economic and trade agreement between canada and the european union become a reality. third, nobody can predict the future disruptive technologies that would allow the global economy to take its next giant step forward. history gives us no reason to be pessimistic with respect to future technological progress. before i wrap up, let me make one more point. international trade, as measured by our standard global trade statistics, is not the only way for companies to exploit integration opportunities. some companies find it more sensible to operate foreign affiliates in other countries while managing them from home. for some firms, this model effectively acts as a substitute for international trade. and this business model has been growing, even while traditional exports and imports have been slowing. we know that sales by canadian - owned foreign affiliates now exceed total exports from canada, approaching 30 per cent of gdp. in other words, these foreign affiliates are almost like another canadian economy out there, supporting jobs in canada in areas such as research and development, engineering, design and marketing, not to mention lawyers, accountants, and executives who manage the operation from home. in the united states, foreign affiliates are

jerome powell : the role of boards at large financial firms speech by mr jerome h powell, member of the board of governors of the federal reserve system, at the large bank directors conference, chicago, illinois, 30 august 2017. * * * good morning. thank you to president evans for inviting me to speak here today about the role of boards of directors of large banking firms. 1 ten years ago this month, the world witnessed the first tremors of what we now think of as the global financial crisis and the subsequent great recession. for the united states and many other countries, this would turn out to be the most painful economic period since the great depression. in the wake of the crisis, governments around the world instituted a wide range of reforms that were designed to reduce the likelihood and severity of a recurrence. in the united states, the core elements of those reforms included significantly higher capital standards ; new liquidity requirements ; forward - looking stress tests ; and resolution planning. our largest banking firms are without question much stronger than before the crisis. we are nearing completion of the major parts of this reform program, and are undertaking a thorough review to help assure that the reforms we put in place are both effective and efficient. 2 during the crisis, some large banking firms incurred massive losses. some of these losses were from products — such as super - senior collateralized debt obligations ( cdos ) or structured investment vehicles ( sivs ) — whose risks were not even on the radar screen of the firm ’ s board of directors. after the crisis, the federal reserve significantly raised our expectations for the boards of directors of large banking firms. taking risk in service of clients is an essential part of the business of banking, including credit risk, interest rate risk, and various forms of operational risk. our reforms were designed to assure that boards of directors understand and approve the strategy of the company and the risks inherent in that strategy, and that the institution has the capital, liquidity, and risk management capabilities necessary to manage those risks. today, the role of a director of a large banking firm is more expansive, more challenging, and more important than ever. boards now oversee management ’ s participation in highly challenging annual exercises, such as stress testing, capital planning, and resolution planning, that have fundamentally changed the business of our largest institutions. boards now more carefully evaluate the compensation practices of these large institutions to assure that they reinforce positive incentives and discourage unwanted risk taking. across a range of responsibilities, we simply expect much