Second, risk can come from unexpected sources. That means we must strive to ensure that the Canadian and the global financial systems are resilient enough to withstand the impact of unexpected events. At the Bank of Canada, we are working on both of these fronts.
The great moderation Let me begin by talking about the “Great Moderation.” For much of the past quarter-century, conventional wisdom held that the global economy was becoming increasingly stable. In the advanced countries, inflation had been tamed, recessions were milder than in the past and financial stability seemed assured.