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Remarks by Paul Jenkins, Senior Deputy Governor, Bank of Canada, to the FMAC/FMA-USA Joint Conference 2004

The global economy has been unfolding largely as expected, and prospects for continued robust growth are quite favourable, especially over the near term.

Businesses are more optimistic about the economic outlook than in the winter survey. The greater stability of the Canadian dollar in the three months since the previous survey has helped to ease concerns among exporters. Businesses continue to expect strong domestic sales.

Lectures delivered by Gordon G. Thiessen, Governor of the Bank of Canada 1994 to 2001

The Bank of Canada has played an integral role in Canadian society for 70 years. When the Bank opened its doors in the spring of 1935, this country was struggling to define itself and to survive the economic and social turmoil of the Great Depression. Like Canada’s economy, its central bank has evolved and grown over the years. It has faced critical challenges and embraced change. But the Bank’s mandate has not changed. It is now, as it was then, to provide an effective, national monetary authority for Canada.

The adjustment of the Canadian economy to major global developments continues to shape the economic outlook.

Cover page

Promissory Notes

The notes featured on the cover measure approximately 21 cm x 8 cm and form part of the National Currency Collection, Bank of Canada.

Photography by Gord Carter, Ottawa

Businesses remain positive about the economic outlook but less so than in the autumn survey. The appreciation of the Canadian dollar between the survey periods has heightened uncertainty among businesses and dampened the expectations of those adversely affected by the rising dollar.

Supplemental questions on the appreciation of the Canadian dollar - Winter 2004-05

As the ultimate provider of Canadian-dollar liquidity to the financial system, the Bank of Canada has the unique capacity to create Canadian-dollar claims on the central bank and the power to make secured loans or advances to chartered banks and other members of the Canadian Payments Association. The Bank supplies overnight credit on a routine basis through the Standing Liquidity Facility (SLF) to direct participants in the Large Value Transfer System, and Emergency Lending Assistance (ELA) to solvent deposit-taking institutions that require more substantial and prolonged credit. The authors review the policy framework that guides the Bank's lender-of-last-resort function, including the key issues, terms and conditions, and eligibility criteria associated with its SLF and ELA activities. Also discussed are foreign currency ELA, the relationship between SLF and ELA, systemic risk and Bank of Canada intervention, and the potential provision of liquidity to major clearing and settlement systems.