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Staff working papers provide a forum for staff to publish work-in-progress research intended for journal publication.

The Board of Directors of the Bank of Canada today announced the appointment of Agathe Côté as Deputy Governor of the Bank effective 30 July 2010.

The recent past has underscored the fact that, in finance and the economy, most things are interconnected on a global scale. Throughout its history, Canada has been powerfully affected by events elsewhere.

Bank of Canada published a report establishing a set of principles to guide the extraordinary liquidity interventions it was making in response to the systemic shocks buffeting the Canadian financial system. These principles provided a framework for maintaining consistency between the Bank’s actions and its responsibilities as lender of last resort to the financial system, while allowing sufficient fl exibility to respond to the unique challenges of the crisis.

Risks to the stability of both the Canadian and the global financial systems appeared to be diminishing for most of the period since the last Financial System Review (FSR), as the recovery in financial conditions and the macroeconomic environment continued to solidify.

FSR Highlights - June 2010

From the end of 2008 to the middle of last year, Canada experienced a short, sharp recession. With the exception of government spending, all major components of aggregate demand declined, and industrial production dropped 15 per cent.