The financial crisis evolved in three main phases, each of which required different policy responses and posed new challenges in explaining their merits. The first phase was marked by the banking crisis, culminating in the collapse of Lehman Brothers in 2008. It prompted a systemic failure of interbank funding markets.
13 Beaudry and Ruge-Murcia (2017) argue that the adoption of the inflation target enhanced the governance of monetary policy in Canada. 14 Previously, interest rate decisions were announced on a more ad hoc basis, often after interest rate adjustments by the US Federal Reserve. 15 See Renewal of the Inflation-Control Target—Background Information—October 2016 and Renewal of the Inflation-Control Target—Background Information—November 2011.