We want to improve regulatory standards so that they should be closer to our country’s reality, and thus generate credit for the private sector. But it is clear that the major challenge is that all our deposits are short term. We cannot request banks to give long-term loans if their whole funding is short term. That would be wishful thinking on our part.
The Canadian economy was operating close to its potential for most of 2017 and 2018, and inflation is at target as a result. Governing Council is of course preoccupied with the recent slowdown in the economy. If it were to persist, then we would foresee inflation trending below target in the future.