In the year leading up to this past June, growth averaged only 1.4 per cent, compared to 2.6 per cent the year before. With Canada’s potential output estimated to be growing at about 2 per cent, growth in demand has not kept pace with the expansion in production capacity, and economic slack has increased.
For example, the ROC requires all banks to establish an audit committee function involving knowledgeable and independent Supervisory Board Members. All banks, you may wonder? Yes, we require such an audit committee function for all, but we allow smaller institutions to meet this requirement within their limited capabilities. This is an example of a principle-based regulation which allows congruence with reality.