Canadian money markets are functioning better after being affected by this summer's turbulence, but they are not yet back to normal, Bank of Canada Governor David Dodge said today in a speech to the Vancouver Board of Trade.

Governor Dodge reiterated his message that the events of the summer have also highlighted the clear case for improved transparency in financial markets. "Markets need information in order to operate efficiently. So it is in the interest of market participants to make sure that parties have access to all the necessary information."

It will take some time to fully assess the implications of the financial market turbulence for the Canadian economy, although it has already meant some tightening of credit conditions for borrowers, the Governor said. The extent of this tightening isn't yet known, although it should temper the growth of domestic demand. The Bank will provide analysis on these issues in the next Monetary Policy Report, to be published on 18 October, said Governor Dodge.