Bank moral hazard Unfortunately, the incentives built into the public sector banking system have made it more difficult for public sector bank executives to follow these principles (I should add that some private sector bank executives have also not been immune on occasion).
To illustrate what is at stake, the Bank of Canada has generated three scenarios for the evolution of global growth and current account positions. 15 The first is a business-as-usual scenario (Chart 3). No significant changes are made to the current mix of policies, which creates a situation similar to the one that led to the recent crisis.