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Across the world's major economies, addressing the failures of banking ranks among the highest policy priorities. In the harsh glare of the current financial turmoil, it is clear that many banks outside of Canada were either not doing their jobs or were doing them in ways that created enormous risks.

With your professional interests in foreign exchange, money markets, capital markets, and derivatives, I'm sure the past year and a half has been exciting and interesting – if those are the right words. We've been living through a period of astonishing financial turbulence, historic marketplace losses, and serious threats to financial stability.

As we have consistently emphasized, stabilization of the global financial system is a precondition for economic recovery, both globally and in Canada. To that end, policy-makers around the globe have acted aggressively and creatively by initiating a series of unprecedented actions aimed at stabilizing the global financial system.

Let me state at the outset that the speed and synchronized nature of the recent global downturn has resulted in a heightened degree of uncertainty, which is evident in the diverse views on the outlook.

These are challenging times, indeed. We are facing a financial crisis without comparison for generations. Most financial markets have experienced historic declines in prices and unprecedented spikes in volatility.

The outlook for the global economy has deteriorated since the October Monetary Policy Report, with the intensifying financial crisis spilling over into real economic activity.

The extraordinary turmoil of 2007 and 2008 has brought to the fore many issues and challenges, most of which will be with us for some time as we deal with what has become the deepest financial crisis since the 1930s. Policy-makers around the world have taken bold and timely steps to deal with the financial instability and economic crisis, but it will take time for confidence to be restored and for markets to become fully functional again.

It has been a difficult year for capital markets professionals. The turmoil has deteriorated into a full-blown financial crisis. Most financial markets have experienced historic falls in prices, and some are strained to the point of closing.

The Canadian financial system has fared relatively well through this crisis, thanks to effective regulation and prudent practices that have worked like sandbags to protect our financial system from the storms in today's global economy.