15  Khalaf and Kichian (2003). Because traditional Phillips curves are reduced-form equations, changes in the monetary policy regime can undermine their use for policy purposes (the Lucas Critique). Research at the Bank has therefore also examined whether the New Keynesian Phillips curve adequately represents inflation dynamics in Canada.
Accounting values are the basis for determining regulatory capital. Nonetheless, accounting capital and regulatory capital reported under the new regulatory reporting standards will generally differ. This is due to the different objectives of accounting and supervisory data. Consequently, prudential filters, as well as other instruments, are applied in order to adjust accounting figures to prudential figures.