Trust is strained at multiple levels Between banks and their shareholders: Most major banks outside Canada are now trading well below their book value, indicating shareholder concerns about a combination of the quality of bank assets and the value of their franchises (Chart 1).
With regard to prices, wholesale prices continue to fall and consumer prices (excluding the effects of institutional changes) have declined slightly below the previous year’s level. With respect to the factors affecting the outlook, the downward pressure on domestic prices induced by the decline in import prices including overseas commodity prices has already weakened.