It contains, for the first time, the judgment of the Governing Council as to the main risks to Canadian financial stability. I will return to this shortly. First, I will say a few words regarding an article in the current FSR, which details efforts by Bank staff to construct an early-warning indicator for financial stress in Canada.
4 An early-warning system The Bank of Canada has developed a financial stress indicator, the FSI, which uses a number of domestic variables to measure the degree of financial stress in the economy. 5 As you would expect, the FSI is now showing record levels of stress. It is correlated with how you all probably feel.