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Recent indicators point to the start of a global recovery from a deep, synchronous recession.

By a narrow margin, the survey results point to continued tightening in credit conditions during the third quarter, following a period of substantial credit tightening for business borrowers (Chart 1).

Responses to the autumn survey suggest that the Canadian economy is recovering, as all indicators of business activity have increased since the summer survey. However, because firms continue to expect activity to pick up only gradually, they remain cautious regarding investment.

Bank of Canada liquidity actions in response to the financial market turmoil; understanding corporate bond spreads using credit default swaps; review of the conflicts of interest between participants in the securitization process highlighting the most recent policy measures and potential solutions for ameliorating these agency issues.

Survey respondents reported continued tightening in lending conditions (Chart 1). This tightening was evident in both the price and non-price1 aspects of business lending (Chart 2). Note that the balance of opinion indicates only the amount of agreement among respondents about the direction of the change in conditions; it does not provide any information on the magnitude of the change.

The global economy has suffered an intense, synchronous recession and considerable excess supply has opened up.

The results of the summer survey indicate that businesses foresee an improvement in the economic outlook. In particular, the balances of opinion on both future sales and employment have turned positive. Nevertheless, firms expect their activity to recover only gradually, and they continue to be cautious regarding investment.