To date, the crisis in Europe has had a limited impact on our financial system. Canadian markets have remained relatively stable, and our banks continue to have good access to wholesale funding markets. Nonetheless, a deterioration in the situation could have a considerable effect on Canada through trade, confidence and financial channels.
Even though our financial system is solid, it is important to take further steps to bolster its ability to absorb shocks. The creation of a central counterparty for the repo market is a step in that direction. With your permission, I will now turn to the crucial role played by the repo market in Canada.