research and working with market participants and regulators on ways to increase transparency in canadian markets, with due regard for liquidity, equitable access, and fair play. together with price transparency, these are the ingredients that help to create efficient, well - functioning markets. it is important that we get transparency and regulation right. but we also need to devote the appropriate time and effort to making the most of whatever rules we write, including existing ones. this means focusing on a range of smaller initiatives that can enhance efficiency. for example, provincial and territorial legislatures need to make the uniform securities transfer act a priority. such an act would provide a sounder legal basis for the holding and transfer of rights in securities that are held in book - entry form, and would replace the current patchwork of legal rules in this area. another initiative is the canadian capital markets association ’ s focus on trade - matching to support progress towards straight - through processing. there ’ s one more area where it is absolutely critical for canada to continue to improve, and that is enforcement. there is a widely held perception that canadian authorities aren ’ t tough enough in punishing fraud and enforcing insider - trading and other rules. that ’ s why it is encouraging to see that steps to toughen enforcement are being taken, by provincial securities commissions, by the investment dealers association, by law - enforcement agencies, and by the federal government. these kinds of steps to improve enforcement must continue. conclusion let me conclude. to improve the economic and financial welfare of canadians, we need an efficient financial system. the bank of canada has been contributing to this goal by enhancing canadians ’ confidence about the value of their money and by reducing risks to the safety and stability of the financial system. our financial system review is part of this effort. but the effort must extend far beyond the central bank. i ’ ve raised some issues today that i think are critical to enhancing the efficiency of our financial system. none of these issues are new. they have been studied and analyzed thoroughly. but while canada has been studying and analyzing, the rest of the world has been acting. it ’ s time for us to act, too. we have to get on with the job of improving efficiency. the future health of our economy and the prosperity of canadians depend on it. 4 / 4

as well as the supervisory bodies, to take remedial measures to increase resilience, as necessary. in addition, given their system - wide perspective, central banks can monitor and evaluate unintended consequences of regulatory standards on the financial system and real economy, especially with respect to market functioning and the availability of credit. fourth, by contributing to the monitoring of systemic risk and the development of macroprudential measures. as noted, most central banks do in - depth analyses of financial vulnerabilities. they also often investigate possible remedial measures to mitigate the vulnerabilities and they share their work with other agencies responsible for macroprudential oversight. the mechanisms for doing this differ according to the macropudential policy framework in each jurisdiction. valuable aspects of the analyses by central banks include monitoring for the impacts of financial innovation and possible instances of risky regulatory arbitrage, as well as the identification of data gaps. bis central bankers ’ speeches again, because of a central bank ’ s system - wide perspective and analytical capacity these contributions are essential for the formulation of appropriate macroprudential policy. such policy initiatives come in all sizes, but let me give you an example of what we did here in canada. in the immediate aftermath of the crisis, household debt and house prices resumed growing faster than disposable income in response to lower interest rates and the recovering economy. the department of finance and a number of agencies, including the bank of canada, worked together to mitigate this growing systemic vulnerability. the bank ’ s analysis of household debt and house prices helped inform the regulatory changes that were adopted. the federal government tightened rules for government - supported mortgage insurance, including increasing minimum down payments. for its part, canada ’ s bank regulator, the office of the superintendent of financial institutions, released new guidance on mortgage underwriting and mortgage insurance that implemented enhanced global standards. these measures were successful in slowing household credit growth and they complemented the bank of canada ’ s accommodative monetary policy by better targeting the stimulus to the most creditworthy households. to further enhance our contribution to macroprudential oversight in canada, we have two aspirations : 1. to develop a framework for system - wide macro - level stress tests that integrates different sectors of the financial system – banking, insurance and investment funds – as well as financial markets and financial infrastructures. 2. to improve our models to better understand the interactions between monetary and macroprudential policy.