While it is unrealistic to expect a combination of microprudential, system-wide and monetary policies to eliminate procyclicality in the financial system and the broader economic cycle, our objective is to make the system more resilient to economic downturns and other aggregate shocks and to moderate the buildup of financial risks.
We learned much from history in crafting the extraordinary policy response at the height of this crisis. Whereas I expect that many early members of the Mount Stephen Club may have lived through very hard times during the Great Depression of the 1930s, this time around the scale of the economic fallout was considerably less severe for Canadians.