toronto and vancouver, the markets that are still adjusting to lower oil prices in alberta and saskatchewan, and the markets that are functioning normally almost everywhere else. after slowing sharply beginning in 2017, the toronto area market appears to be stabilizing, while resales and prices continue to fall in the vancouver area. prices in both areas remain 40 to 60 per cent higher than they were four years ago, suggesting that housing imbalances remain an important macrofinancial vulnerability. the housing market as a whole continues to benefit from solid fundamentals, including population growth and strong job creation. one more main vulnerability from the last fsr that we continue to watch is the possibility of a major cyber attack on a financial institution or market infrastructure, such as the payment systems that we all rely on every day. cyber threats remain a key structural vulnerability, and the number of incidents that have or could have resulted in substantial financial losses has increased steadily over the past decade. financial system participants are particularly concerned about cyber incidents at third - party service providers. the bank has been working with major banks and financial market infrastructures to improve coordination and information sharing, which is crucial for improving resilience. 1 / 2 bis central bankers'speeches in this fsr, we have placed more focus on two other vulnerabilities. one relates to corporate debt funding. the level of non - financial corporate debt in canada is well above its historical average. while the average firm has enough liquid assets to manage an increase in interest rates or a decline in income, some companies have relatively few liquid assets and less capacity to service their debts. in this context, lower - rated firms are relying more on us high - yield bonds and leveraged loans, and borrowers in these markets are more vulnerable to sudden swings in investor sentiment. we will be monitoring the situation. we are also putting more emphasis on the vulnerability related to crypto assets. these continue to pose little threat to the financial system. but crypto markets and the uses of the underlying technology are changing quickly. so, implications for financial stability might arise suddenly. i would add that recent swings in prices for crypto assets and losses at crypto companies underline the need for investors to understand all the risks before they enter these markets. we have also added a new vulnerability : climate change. there is a broad range of authorities that are tasked with assessing and mitigating the impacts of climate change. for central banks, the focus is on the risks that climate change poses to

those anticipated in october, although its profile is marginally firmer. both total and core inflation are expected to moderate in 2012 before reaching 2 per cent by the third quarter of 2013, as excess supply is slowly absorbed, labour compensation grows modestly and inflation expectations remain well - anchored. several significant upside and downside risks are present in the inflation outlook for canada. bis central bankers ’ speeches the three main upside risks to inflation in canada relate to the possibility of stronger - than - expected inflationary pressures in the global economy, stronger - thanexpected growth in the u. s. economy and stronger momentum in canadian household spending. the two main downside risks to inflation in canada relate to sovereign debt and banking concerns in europe and the possibility that growth in household spending could be weaker than projected. overall, the bank judges that these risks are roughly balanced over the projection horizon. reflecting all of these factors, the bank yesterday maintained the target for the overnight rate at 1 per cent. with the target interest rate near historic lows and the financial system functioning well, there is considerable monetary policy stimulus in canada. the bank will continue to monitor carefully economic and financial developments in the canadian and global economies, together with the evolution of risks, and set monetary policy consistent with achieving the 2 per cent inflation target over the medium term. with that, tiff and i would be pleased to take your questions. bis central bankers ’ speeches