that the necessary means are available and can be applied. the advantages of delegating monetary policy to an independent central bank have been analysed fairly extensively in academic research. the main argument for delegation is that politicians can avoid the temptation to use monetary policy for short - term stimulation of output and employment. the collective experience of previous years - and from academic research - is that such stimulation often runs the risk of leading to wage - price spirals, which in the end can have severe implications for welfare in society. a parallel argument can be made concerning policy for financial stability, although it is still a rather unexplored topic in economic literature. by delegating the lender of last resort function to the central bank, and making it clear that the central bank will not support insolvent banks, the politicians can avoid the temptation to use central bank funds to bail out banks in financial difficulty. another reason for giving the central bank formal operational independence is that only then can the executive board of the central bank be made fully accountable for the bank's operations, and as i have said already, accountability is a crucial means of attaining efficiency. transparency accountability is intertwined with the issue of transparency, not only through clearly defined objectives, but also through actions. a central bank should be clear about which actions are being taken and for what reasons. most people agree that central banks should do their best to minimise uncertainty over policy actions, as this will make policy more efficient. as my colleague mervyn king said, if monetary policy becomes so undramatic and predictable that it is boring, then we will really have achieved a low level of policy uncertainty! the issue that remains open to debate is which information should be published and when. at the riksbank, we have chosen to publish our inflation forecasts four times per year and to publish edited minutes of the executive board meetings, where interest rate decisions are taken with a lag of about two weeks. while we strive to be as open as possible, there are of course limits. one of the most important is determined by what we know about the functioning of the economy and the effects of monetary policy. not everyone agrees, however, that transparency is a good thing for attaining financial stability. many people argue that so - called constructive ambiguity is the best way to avoid problems of moral hazard in the banking industry. i believe, however, that transparency is important in this area as well. banks that are " too big to fail " from a

mark carney : summary of the latest monetary policy report opening statement by mr mark carney, governor of the bank of canada, at the press conference following the release of the monetary policy report, ottawa, 22 april 2010. * * * good morning. i am pleased to be here with you today to discuss the april monetary policy report, which the bank published this morning. global economic growth has been somewhat stronger than projected, with momentum in emerging - market economies increasing noticeably and moderate recovery underway in most advanced economies. global growth is now projected to average slightly above 4 per cent a year through 2012. in canada, the economic recovery is proceeding somewhat more rapidly than expected in january. it is supported by continued fiscal and monetary stimulus, improved financial conditions, the rebound in global economic growth, more favourable terms of trade, and increased business and household confidence. this year should mark the turning point when the private sector takes over from the public sector as the primary source of growth. gdp is now projected to grow by 3. 7 per cent in 2010 before slowing gradually to 3. 1 per cent in 2011 and 1. 9 per cent in 2012. this profile reflects stronger near - term global growth, very strong housing activity in canada, and the bank ’ s assessment that policy stimulus resulted in more expenditures being brought forward in late 2009 and early 2010 than expected. at the same time, the persistent strength of the canadian dollar, canada ’ s poor relative productivity performance, and the low absolute level of u. s. demand will continue to act as significant drags on economic activity in canada. the bank estimates that gdp in the first quarter of 2010 was about 1 per cent below its peak in the third quarter of 2008 and some 2 per cent below its potential. the economy is expected to return to full capacity in the second quarter of 2011, one quarter earlier than projected in january. the outlook for inflation reflects the combined influences of stronger domestic demand, slowing wage growth, and overall excess supply. core inflation, which has been somewhat firmer than projected in january, is expected to ease slightly in the second quarter of 2010 as the effect of temporary factors dissipates, and to remain near 2 per cent throughout the rest of the projection period. total cpi inflation is expected to be slightly higher than 2 per cent over the coming year, before returning to the target in the second half of 2011. despite the firming of the global and canadian recoveries, there are considerable risks around the bank ’ s outlook.