While there are some mechanisms to mitigate the risk of these attacks, defenses are limited because organizations rarely control their entire software supply chain.4 This is an example of a threat that a bank on its own may not be best equipped to address. Therefore, regulators should carefully consider the appropriate entity for the focus of regulatory attention.
In doing so, I hope to underline just how important efficiency is for everybody who is concerned about Canada's long-term economic health. But before I begin, I should start by saying why financial system efficiency is so important. When a financial system is operating at peak efficiency, investors receive the highest risk-adjusted returns on their investments, and borrowers minimize the costs of raising capital.