HALIFAX, June 21, 2012 /CNW/ - An open, resilient global financial
system is required to underpin sustained global economic growth and
realise the potential of globalisation, said Mark Carney, Governor of
the Bank of Canada. Globalisation has lifted hundreds of millions of
people out of poverty and created the potential for hundreds of
millions more to follow in their path. "But this transition will not be
smooth, and it is not preordained," the Governor said.
"In many respects, the problems we face today are the product of two
flawed monetary unions," the Governor said. One is the formal European
monetary union; the other is the international monetary system,
informally known as Bretton Woods II. "In both cases, financial reforms
will be integral to the solution," Governor Carney said in a speech to
the Atlantic Institute for Market Studies. "An open, resilient global
financial system will be central to the transformation of the global
economy," he said. "In order to achieve that, financial sector reform
is a must."
The Governor stressed that reform of the financial system must take into
account its global nature. "It is not enough to have our own house in
order unless we seal ourselves off from the world - and if we were to
do that we will end up much poorer."
There are four main components to the global financial reform agenda:
building resilient institutions,
creating continuously open markets, and
moving from shadow banking to market-based finance.
To preserve the advantages of an open and globally integrated financial
system, full and consistent implementation of agreed reforms is
necessary across the G-20. Recent experience demonstrates that when
mutual confidence is lost, the retreat from an open and integrated
system can occur rapidly. "A return to a nationally segmented global
financial system would reduce both system resilience and financial
capacity for investment and growth," the Governor said.
Governor Carney concluded his speech with comments on Canada's current
economic environment. Despite ongoing global headwinds, he said "the
Canadian economy continues to grow with an underlying momentum
consistent with the gradual absorption of the remaining small degree of
SOURCE Bank of Canada
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