A major strength that traditional banks possess is a reputation for trustworthiness built over several decades. The banks have capital and can weather intense competition. They also have the benefit of experience and tried-and-tested infrastructure alongside specific financial knowledge of risk management, local regulations and compliance.
Consistent with this profile for solid U.S. and global economic growth and with the expectations of financial markets, we continue to assume some upward movement in global policy interest rates to moderate inflation pressures as output levels approach production capacity. Canada’s economic prospects Let me now turn to Canada, beginning with a quick recap of the first half of 2004.