Policies will work: BOC

Given the rapid onset of what is being hailed as the worst recession since the Great Depression, it’s easy to understand why Canadians may have lost faith in the financial system. But the policy measures the central banks have taken will restore confidence, according to the Bank of Canada’s governor.

“There is a plan to restore confidence and growth, we are implementing it, and it will work,” Governor Mark Carney said, speaking to a joint meeting of the Northwest Territories and Yellowknife Chambers of Commerce.

The Bank has been working closely with foreign central banks to re-establish trust in the global financial system. The stability of that system is a precondition to recovery, which Carney said Canadians can expect, rather than hope for.

While the Bank has eased monetary policy, the federal government has employed fiscal policy in an attempt to resuscitate the economy.

So far, the policies have been on the right track, but more needs to be done, according to Ian Russell, president and CEO, Investment Industry Association of Canada.

“Canadians are fortunate that the Bank of Canada and the federal government have acted promptly and effectively throughout this financial crisis to improve trading and financing conditions in corporate credit markets, particularly in the securitized marketplace,” he told the House of Commons Standing Committee on Finance today.

But, “authorities must remain vigilant in monitoring and identifying pockets of illiquidity that may disrupt the normal functioning of important sub-markets, or the market as a whole, and continue to assess what could be done to address such situations,” he continued.

This story was originally published by Canadian Insurance Top Broker.