23 March 2017
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Economists love to debate the details, but for monetary policy, getting the big things right matters much more than getting the decimal points right. The past year illustrates this well, as the major economic themes we identified a year ago played out largely as expected.
The year 2016 marked the 25th anniversary of the monetary policy framework that has helped the Bank of Canada promote low, stable and predictable inflation. The inflation targeting agreement with the Government of Canada was renewed, and the Bank will maintain a 2 per cent target for total consumer price inflation until 2021.
The Bank has a robust planning framework in place to implement and operationalize its mandate and vision. Every three years, the Bank establishes a medium-term plan (MTP) to set out its strategic direction and objectives.
The Bank collaborates with its partners in the public and private sectors on specific measures to build a more resilient financial system, including ongoing reforms to address weaknesses identified during the 2007–09 global financial crisis.
Consistent with the Government of Canada’s objectives, the debt program focused on raising stable and low cost funding for government programs and services, while maintaining a liquid and well-functioning market or Government of Canada securities.
A strong management and operating framework provides the foundation for the Bank of Canada’s core functions and activities.
The Bank of Canada is committed to openness and transparency in communicating its policies and actions.
The Bank of Canada’s work on the international stage helps it achieve its mandate each year. Understanding the global economy is essential to both formulating monetary policy in Canada and identifying risks to the financial system.
The Bank of Canada Act provides the legal authority and framework for governance of the Bank of Canada.
The Bank maintains a strong risk management culture and an enterprise risk management (ERM) framework that promotes the consistent management of strategic, operational and financial risks.
The Bank’s holdings of financial assets are generally driven by its role as the exclusive issuer of Canadian bank notes. The Bank invests the proceeds from the issuance of notes into Government of Canada securities that are acquired on a non-competitive basis.