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The global economy is entering a new phase of unusual uncertainty and the recovery can be expected to be modest and uneven, Bank of Canada Governor Mark Carney told the Windsor-Essex Chamber of Commerce today.

Insights from financial markets are somewhat fleeting at the moment. A broad range of asset prices from the Canadian dollar to S&P500 futures to European sovereign spreads are unusually correlated and volatile.

Keynes wrote prophetically of the economic consequences of the Treaty of Versailles. Could the same be said of current financial reforms? Are policy-makers taking for granted the essential role performed by finance in a vain pursuit of its risk-proofing?

The economic case for global financial sector reform is compelling, and the basic stakes are enormous, Bank of Canada Governor Mark Carney argued today in Berlin in a lecture that focused on the costs and benefits of reform. "Without credible, coordinated financial reforms, we risk losing the open trading and financial system that has underpinned the economic miracle of recent times," he said.