Yet this mechanism hardly worked during the crisis in the euro area. Even worse: Depositors in crisis-hit countries lost confidence in their domestic banking systems and withdrew their deposits. Banks in the euro area also lost confidence in each other and reined in their lending. The Banking Union was created in part to overcome the financial fragmentation triggered by the sovereign debt crisis.
It is my pleasure to introduce to you Tiff Macklem, who assumed the post of Senior Deputy Governor of the Bank of Canada on Canada Day. We are pleased to be here with you today to discuss the July Monetary Policy Report, which the Bank published this morning.   The global economic recovery is proceeding but is not yet self-sustaining.