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  • November 19, 1998

    Opening Statement before the Standing Senate Committee on Banking, Trade and Commerce

    Opening statement Gordon Thiessen Standing Senate Committee on Banking, Trade and Commerce
    Mr. Chairman, my colleagues and I always welcome our appearances before your committee. We released our latest Monetary Policy Report this past Monday. It covers a broad range of economic and monetary issues and provides an account of our policy actions and their results. The ultimate objective of Canadian monetary policy is to help create […]
    Content Type(s): Press, Speeches and appearances, Opening statements
  • November 17, 1998

    Opening Statement before the House of Commons Standing Committee on Finance

    Opening statement Gordon Thiessen House of Commons Standing Committee on Finance
    Mr. Chairman, my colleagues and I welcome these appearances before your committee following each edition of the Bank of Canada’s Monetary Policy Report. As you know, we published our latest report yesterday. It touches on a wide range of economic and monetary issues and provides an opportunity for us to account for our policy actions […]
    Content Type(s): Press, Speeches and appearances, Opening statements
  • November 16, 1998

    Release of the Monetary Policy Report

    Opening statement Gordon Thiessen
    This morning we released our eighth Monetary Policy Report. The period since our last report has certainly been an eventful one from a monetary policy perspective. During the past six months, global economic uncertainties intensified, particularly following Russia's decision in August to declare a debt moratorium. Many emerging market countries were faced with large capital […]
    Content Type(s): Press, Speeches and appearances, Opening statements
  • November 14, 1998

    Lower inflation: Benefits and costs

    Bank of Canada Review - Autumn 1998 Donald Coletti, Brian O'Reilly
    The federal government and the Bank of Canada have been committed for some time to achieving and maintaining price stability as a way to foster a rising standard of living for all Canadians. To support this objective, the inflation-control target range of 1 to 3 per cent was recently extended through to the end of 2001. By then, the government and the Bank plan to announce a long-run target for monetary policy. In this article, the authors provide an overview of the most recent empirical evidence on the benefits of lower inflation. They draw on an extensive earlier survey and on work presented at two recent conferences on price stability hosted by the Bank of Canada. They find that, when inflation and tax interactions are taken into account, there are large benefits to lowering inflation. When these benefits are compared with the transitional costs associated with lowering inflation, significant positive benefits remain. However, the authors note that the extension of the inflation-control targets to the end of 2001 allows further research to ensure an operational definition of price stability that will help Canadians achieve a high standard of living.
    Content Type(s): Publications, Bank of Canada Review articles Topic(s): Inflation: costs and benefits
  • November 13, 1998

    Currency crises and fixed exchange rates in the 1990s: A review

    Bank of Canada Review - Autumn 1998 Patrick Osakwe, Lawrence L. Schembri
    Currency crises in the 1990s, especially those in emerging markets, have sharply disrupted economic activity, affecting not only the country experiencing the crisis, but also those with trade, investment, and geographic links. The authors review the theoretical literature and empirical evidence regarding these crises. They conclude that their primary cause is a fixed nominal exchange rate combined with macroeconomic imbalances, such as current account or fiscal deficits, that the market perceives as unsustainable at the prevailing real exchange rate. They also conclude that currency crises can be prevented through the adoption of sound monetary and fiscal policies, effective regulation and supervision of the financial sector, and a more flexible nominal exchange rate.
    Content Type(s): Publications, Bank of Canada Review articles Topic(s): Exchange rates
  • November 12, 1998

    The LVTS—Canada's Large-Value Transfer System

    Bank of Canada Review - Autumn 1998 James Dingle
    The LVTS is an electronic network for sending and receiving large-value payments. It is expected to become operational in the first half of 1999. Major chartered banks and other large deposit-taking institutions will provide access to the system for their clients in the financial, corporate and government sectors. Canada’s LVTS exceeds world standards for risk control in large-value systems. The author explains how this is achieved through the netting, bilateral and multilateral credit limits, collateral, and loss-sharing procedures used in the event of a default, and, as a last resort, a guarantee by the Bank of Canada. The LVTS gives participating institutions certainty of settlement for their LVTS positions every day, even if one or more participants default. This greatly reduces systemic risk in the financial system. Moreover, the LVTS supports finality of payment; that is, it makes funds unconditionally and irrevocably available to the receiver. Finality is highly desirable when the amount of the payment is substantial, or when exact timing is critical. Since the LVTS will carry the great majority of the value of all payments in Canada, it should be considered the core of the national payments system.
    Content Type(s): Publications, Bank of Canada Review articles Topic(s): Payment clearing and settlement systems
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