Let me now turn to some challenges for the Bank, other policy-makers, lenders and investors, with regard to the promotion of a sound housing market in Canada. Challenges for policy-makers and financial markets The first challenge is to continue to ensure that policies encourage the right kind of practices and innovation in mortgages and home equity lending.
In this regard, it is extremely important that sound lending standards be consistently applied – even in "good times." We should be wary of innovations that encourage price run-ups beyond what fundamentals would justify; many such innovations will fail the test of time.