 |
 |
|
| Advertise Here! |
|
Thursday, September 02, 2010 | |
 |
|
Contact Us Advertising Site Map | |
|
|
|
 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
 |
|
 |
Mail
this page to a friend |
|
|
 |
Add this page to your favorites |
|
|
 |
Make
this page your home page |
|
|
Event Speeches & Presentations Archive
Bank of Canada governor speaks at PACIFIC ECONOMIC FORUM in first speech since dollar reached parity
Tuesday, September 25, 2007
 |
| Bank of Canada governor David Dodge says there are lessons to be learned from the latest financial turbulence. All Photos: Dave Roels |
By Anna Grimes
Venue: Pan Pacific Vancouver
There are lessons to be learned from the fairly serious turbulence that has taken place in global and Canadian financial markets over the past seven weeks, Bank of Canada governor David Dodge told The Vancouver Board of Trade in what was likely his last speech in Vancouver before his tenure as governor ends in January, 2008. It was also his first speech in Canada since our dollar reached parity with its U.S. counterpart.
“Turbulence in financial markets is not easy to deal with, and it is certainly not welcome,” Dodge said at the sold-out PACIFIC ECONOMIC FORUM™ event, sponsored by Vancity.
“But if we can learn from these events and retain the valuable lessons, then global financial markets can emerge from this turbulence stronger and more efficient than before.”
One lesson Dodge reiterated was the importance of transparency in financial markets. “Investors should demand greater transparency where it is now lacking,” he said. “Vendors of financial instruments will then need to structure them in such a way that market players can clearly see what they are buying. More fundamentally, investors must take on more responsibility for diligent research, so that they can better understand the nature of their investments.”
 |
A second lesson Dodge mentioned is the need to put the right incentives in place for loan originators, so that credit quality is maintained and appropriately priced.
“The creation of loans for immediate securitization reduced the incentive for originators to maintain credit standards,” he said. “This indicates a classic principal-agent problem: Since the originators were immune from default risk once the loan was securitized and sold, they often lacked the proper incentives to adequately assess the creditworthiness of the borrower.
We need to think hard about how to get the incentives right.”
While not quite back to normal, Canadian money markets are functioning better after being affected by this recent financial unrest.
 |
| Members of The Vancouver Board of Trade’s Company of Young Professionals join Dodge and Tamara Vrooman (far right), CEO of Vancity, who sponsored the event. |
Gauging the longer-term effects of the summertime turbulence on credit conditions will be one of the Bank’s most pressing tasks over the coming months, Dodge reported. The Bank will publish it’s analysis of these issues in its next Monetary Policy Report, which will be published on October 18.
Dodge is no stranger to financial turbulence. Prior to being named Bank of Canada governor for a seven year term, he held senior positions in the Ministry of Health and the Ministry of Finance, where, as deputy minister, he helped balance the federal budget and silence The Board’s infamous Debt Clock .
Read the full text of David Dodge’s speech
David Dodge Reception - Sept 28, 2007
Photos by Dave Roels
Click here to view this gallery as a slideshow OR click on any thumbnail below to view a larger image (pop-ups must be enabled for www.boardoftrade.com). |
|||||
|
|
|
|||
|
|
|
|||
|
|
|
|||
 |
|
|
|||
)
)
)
)
)
)
)
)
)
Copyright 1999-2009 The Vancouver Board of Trade. All Rights Reserved
Site Credits Privacy Policy
