The latest developments are consistent with the lagged response of loan developments to economic activity over the business cycle that was also observed in past cycles. Banks have gradually increased the overall size of their balance sheets recently, but the challenge remains for banks to expand the availability of credit to the non-financial sector when demand picks up further.
It’s also the first in-person speech by a member of Governing Council since the onset of the COVID-19 pandemic. Incidentally, the last in-person speech by the Bank was also to your organization in March 2020, right before society—and the economy—shut down. There’s just something about being able to speak in person that makes it easier to connect—to build trust and credibility.