Today, I want to talk about Canada's system of pension plans and how they contribute to the efficiency of financial markets and of the economy as a whole. Before I talk specifically about pensions, let me begin with a few words about financial system efficiency in general. What exactly do I mean by efficiency?
An efficient financial system is one that helps to allocate scarce economic resources to the most productive uses, in the most effective way. An efficient financial system reduces the misallocation or waste of economic resources. This is important because, by making our financial system as efficient as possible, we maximize our chances of generating sustained economic growth and prosperity.