We have substantially marked down our estimate for Canada’s potential growth to about 1 percent a year through 2023. I explained earlier how our outlook is highly conditional on assumptions about the virus. Beyond these, it is also subject to several important risks.
And thanks to the creation of the Single Supervisory Mechanism (SSM) and the comprehensive assessment of banks’ balance sheets, banks are actually stronger now than they were a few years ago. Capital ratios for euro area banks have risen from around 8% in 2007 to close to 14% today. In other words, the risks are currently falling, not rising.