holders have also seen their wages go up. some have proactively adjusted their spending to help offset higher debt payments. many also report higher levels of savings available to offset increased payments. 2 / 3 bis - central bankers'speeches overall, the evidence suggests that households have the flexibility to continue servicing their debt at higher rates. we will be watching the data closely for signs of increased financial strain among households, both mortgage holders and non - mortgage holders. we'll also be watching how the labour market evolves, since the biggest factor that determines whether someone can service their debt is if they have a stable income. higher interest rates are also affecting businesses. higher rates are slowing demand for the goods and services that businesses sell, while also increasing their financing costs. so far, the financial health of large businesses appears solid. but smaller businesses are showing more signs of financial stress. insolvency filings by smaller firms have recently jumped after several years of below - average filings. there is some indication that this recent increase could be a catch - up or normalization, and the timing could be driven in part by the expiry of government support programs put in place during the pandemic. turning to canadian banks, overall, credit performance remains strong. banks are proactively contacting customers who are facing payment increases at renewal and working with them on a payment plan. they have also been putting more money aside to cover future loan losses, and they continue to maintain healthy capital and liquidity buffers. this means that even if financial conditions and credit performance deteriorate, banks are positioned to absorb losses and continue to provide credit. in the non - bank financial sector, more frequent volatility in financial markets in recent years has led to an increased focus on liquidity risks. at the same time, some firms are increasingly using leverage, or borrowed money, to fund trading activities. this makes them more vulnerable in the event of large market swings. let me close by repeating an important point the governor made at the beginning : the connections in the financial system mean that if risks materialize in one sector, they can spread quickly. this puts a premium on preparedness. the proactive steps taken by financial system participants have been positive. and they need to continue. a stable and resilient financial system benefits all canadians. the governor and i will now be happy to take your questions. 3 / 3 bis - central bankers'speeches

of the uncertainty that impedes debt restructurings by providing independent analysis of the future growth prospects of the country concerned, advice on possible adjustment measures, and an assessment of the global economic and financial outlook. with this information at hand, creditors and debtors can then seek market - based solutions. the fourth and final characteristic is transparency and accountability. i said earlier that the fund needs to be clear about its main objectives and its policy framework. the imf must also ensure that clear lines of responsibility within the organization support the framework. and it must be transparent about the reasons for its decisions. in other words, the fund needs a governance structure that helps it achieve its goals and holds individuals accountable. currently, decision - making responsibilities are divided among the board of governors, the executive board of directors, and the managing director and staff. but the division of responsibilities among these groups is not, in practice, always clearly defined. accountability is dispersed, and decision - making lacks transparency. the imf would be more effective if the executive board focused on setting strategic direction, as well as ensuring that policies are sound and that objectives are met. the managing director would then be responsible for policy implementation, and be accountable to the board. this framework would help to ensure that the responsibility for policy formulation and implementation was clear and borne appropriately by the members of the board and the managing director, respectively. toward this end, bank of england governor mervyn king has recently suggested establishing a non - resident executive board that meets periodically, rather than almost continuously, and that focuses on strategic direction and oversight. accountability and transparency of the board's decision - making would also be enhanced with more frequent and more timely reporting. finally, and very importantly, surveillance and analysis must be, and seen to be, independent of political influence. conclusion i'd like to conclude by underscoring a key point. the progress made by central banks in furthering the economic well - being of their citizens has largely been the result of determining the most appropriate objective - low and stable inflation - and determining how best to achieve it in a transparent and accountable fashion. for many central banks, this has meant inflation targeting. i've suggested that there are lessons here for the international monetary fund. a more effective imf really does matter. in a world of floating exchange rates, large private capital flows, and liberalized trade, we need an effective forum in which the issues that shape the global economy can be discussed with candour and good will,