heard from firms that say the current interest rate environment is making financing more difficult. however, investment levels were also weak in the years before the pandemic, when rates were much lower than today. more generally, in times of upheaval it's natural for companies, especially established ones, to want to be cautious and build reserves. i understand that. we see the risks out there. yet these same forces and risks are also present in other countries. and companies in those countries - our global competitors - continue to invest, widening the gap with canada, making it increasingly urgent that we turn the situation around. 5 / 6 bis - central bankers'speeches the bank of canada has a role here. it's our job to deliver the economic stability that should encourage investment. you can be sure we will continue to do all we can to keep inflation low, stable and predictable, supporting the investment climate along the way. this is our contribution to helping bring about an economy that's not only more productive but also more resilient. conclusion it's time for me to wrap up. i hope i've been clear about the pressing need for canada to increase productivity. i'm saying that it's an emergency - it's time to break the glass. i've used some pretty grim statistics to support my point. but the urgency comes not only from the fate that awaits us if we don't act. it also comes from the payoff if we do. so let me conclude on a more uplifting note. higher productivity should be everyone's goal because it's how we build a better economy for everyone. when a business gives workers better tools and better training, those workers can produce more. that, in turn, means more revenue for the business, which allows it to absorb rising costs, including higher wages, without having to raise prices. for our part, central bankers look at the economy as a whole, not at individual companies. and when the entire economy becomes more productive, that means the country can have more growth before we see upward pressure on inflation. we can have more jobs. we can have higher wages. we've all just been through a wrenching period in the global economy. we've been reminded how corrosive inflation is and how difficult but necessary the remedy can be. increasing productivity is a way to protect our economy from future bouts of inflation without having to rely so much on the cure of higher interest

of bilateral exposures is replaced by one exposure to a hub, the central counterparty. this process does not, however, eliminate risks? risks that are now concentrated in a single institution. as a result, for a central counterparty to contribute to reducing systemic risk, it must have solid risk - control mechanisms in place and be subject to rigorous oversight. cdcc has implemented mechanisms to manage the various risks confronting it, notably, legal, operational and financial risk. with regard to financial risk, controlling both credit and liquidity risk is key to containing overall counterparty risk in the system. 3 the legal rules that govern cdcc ’ s management of defaults, together with the financial resources available to it for addressing credit risk and liquidity risk, enhance the stability of the repo market by ensuring an orderly winding down in the event that a major institution defaults, while also ensuring that all novated transactions are settled. during the crisis, the benefits of a central counterparty became apparent with the bankruptcy of lehman brothers. thanks to the participation of lehman in a central counterparty for derivatives, its positions on interest rate swaps – which were enormous ( us $ 9 trillion and more than 66, 000 transactions ) – were unwound in an orderly and timely fashion. thus, the market for interest rate derivatives – another core market – continued to function smoothly despite the lehman collapse. the role of the bank of canada in light of the crucial role played by this central counterparty service in the efficient functioning of the repo market, the bank of canada considered that the canadian derivatives clearing service ( cdcs ) might pose a systemic risk, whereupon it designated the cdcs under the payment clearing and settlement act. consequently, cdcs has been subject to oversight by the bank since 30 april 2012. n. chande, n. labelle and e. tuer, “ central counterparties and systemic risk, ” bank of canada financial system review, ( december 2010 ) : 43 – 50. p. chatterjee, l. embree and p. youngman, “ reducing systemic risk : canada ’ s new central counterparty for the fixed - income market, ” bank of canada financial system review ( june 2012 ) : 43 – 49. bis central bankers ’ speeches the bank ’ s oversight process includes reviewing significant changes to both the system and its operating rules, reviewing the results of audits, and defining standards. in carrying out its oversight mandate, the bank works closely with the relevant financial