I want to thank the Federal Reserve Bank of Atlanta for inviting me to join you for today’s 2013 banking outlook discussion. There are a number of interesting and very relevant topics on your agenda, most of which are rightly focused on the financial and regulatory environment.
Type One exchange rate movements reflect changes in the aggregate demand for Canadian goods and services. Type Two movements reflect other factors. The key point is that these two types of currency movement have different implications for monetary policy. In general, there's less of a need for monetary policy to respond to a Type One movement than to a Type Two movement.