Indeed, in the Bank of Canada's latest Monetary Policy Report, published on Thursday, we projected that the cost of credit for Canadian firms and households relative to our policy interest rate will be about 25 basis points higher over the projection horizon than it was prior to the summer.
The challenge for monetary authorities is to determine the persistence of this tightening and re-intermediation, because it could affect the conduct of monetary policy going forward. Policy challenges ahead Aside from this issue for monetary authorities, this summer's events have led to policy challenges in other areas that are of mutual interest to central banks, regulators, and private sector financial institutions.