(I add here that, in the discussion on this, we would have preferred the output floor to be more rigorously calibrated, in light of the experience of Italian supervision, which had always discouraged particularly aggressive modelling in banking system practices). 2. It increases the robustness of the standardised method for credit risk and its sensitivity to risk.
Over the two decades leading up to the global financial crisis, a consensus emerged that keeping inflation low, stable and predictable was the best contribution that monetary policy could make to the financial well-being of Canadians. Our inflation-targeting framework has always had a degree of flexibility built into it; and financial stability issues have always been part of the discussion.