important bank ( d - sib ) fails. canada has made good progress in putting in place the g - 20 reforms in the spirit in which they were intended. we ’ ve implemented basel iii ahead of schedule and started work on recovery and resolution plans for d - sibs. some jurisdictions have also made rules that deliberately separate different parts of their financial systems. for example, some have enacted changes to ring - fence retail banking activities within banking groups to limit the funding of investment banking activities with deposits backed by government safety nets – vickers in the united kingdom and volcker in the united states. international monetary fund, navigating monetary policy challenges and managing risks, global financial stability report, april 2015. based on calculations using data from the bank for international settlements ( bis ) ( consolidated banking statistics ) and the international monetary fund ( world gdp, from the world economic outlook ( weo ) database ). c. borio, “ the international monetary and financial system : its achilles heel and what to do about it ”, bis working paper no. 456, september 2014. in the decade leading up to financial crisis, global banks ’ cross - border claims as a share of world gdp increased tenfold, from 6 per cent in 1995 to 60 per cent in 2007. bis central bankers ’ speeches every jurisdiction has different requirements, and our view is that we must ensure that jurisdictions don ’ t go too far down the road toward more domestically oriented financial system reforms. in an interconnected world, the actions of one country affect others. if all jurisdictions act in their own national interest, narrowly defined, everyone could be left worse off. co - operative outcomes are superior. mutual recognition this points to the need for coordination among regulators. the g - 20 reforms can make the world safer for international capital flows only as long as there is consistent implementation of international standards and mutual recognition among authorities. if we fail to achieve this, we could end up with inconsistent and incomplete regulations that impede desirable flows and create scope for circumvention. canada has stayed away from imposing structural reforms that would create a separation between commercial and investment banking activities, focusing instead on a principlesbased approach. historically, canadian banks have benefited from diversification in their business lines, and the consolidated supervision of the banking group by the office of the superintendent of financial institutions has been effective. 8 a lot of work remains at the international level. it hasn ’ t been easy to agree on plans to coordinate cross - border recovery and resolution

david dodge : economic and financial trends in canada opening statement by mr david dodge, governor of the bank of canada, at a press conference following the release of the monetary policy report, ottawa, 22 october 2003. * * * today, we released our october monetary policy report. the report reviews economic and financial trends in the context of canadaa€™s inflation - control strategy. since our april report, the canadian economy has been hit by a number of unusual shocks : sars, bse, the ontario electricity blackout, and the severe forest fires in british columbia. inflation has also fallen faster and further than expected. this drop in core inflation reflected several unforeseen developments. these included a broad - based weakness in the prices of goods, substantial reductions in the prices of tourism - related services because of sars, and a slightly faster easing of pressures from auto insurance premiums. the substantial fall in the value of the u. s. dollar added to the weakness in goods prices. we now estimate that there is more slack in the economy than was projected in april. the prospects for near - term growth in the global economy have improved since april, and geopolitical uncertainty has continued to decrease. the near - term outlook for the u. s. economy is much improved. the economy in the euro area is still weak, but prospects for asia look bright, led by china and india. the japanese economy is performing better than anticipated. we expect growth in the canadian economy to strengthen during the fourth quarter and through 2004. on balance, the expansion should be above the rate of potential growth, relying primarily on solid household spending and increased business investment. stronger growth abroad should boost foreign demand for canadian products, but this will be dampened by the higher value of the canadian dollar. growth is expected to average a little over 3 per cent in the second half of 2003 and 3 1 / 4 per cent in 2004. with growth above potential, the slack in the economy should be absorbed by early 2005. we expect core inflation to average just over 1. 5 per cent for the rest of 2003, and to fall to just above 1 per cent in early 2004, as the effects of earlier increases in auto insurance premiums dissipate. core inflation should return to 2 per cent by mid - 2005, as economic slack is taken up. total cpi inflation will continue to be importantly affected by swings in the price of crude oil. if prices ease to us $ 27 per barrel next year, total