While we recognized the possibility that this reduction could, at the margin, exacerbate the vulnerability posed by household imbalances, the more important effect of lowering the policy rate last year was to cushion the drop in income and employment caused by lower resource prices. Another natural consequence of the shock to our terms of trade has been a decline in the Canadian-dollar exchange rate.
As you know, this is my last testimony before your Committee. I have had the privilege to preside over the ECB for the past five years, guiding it from its very inception through a number of crucial - and successful - stages, such as the introduction of the euro in 1999 and, three years later, the euro cash changeover.