Finance committee  Thank you. Yes, when I arrived at the bank in 1981, for the second time, for my full-time job, we didn't have inflation targets then. We had money targets and they were posing some difficulties at the time, and since my thesis had been on exactly that, I was able to.... I was hoping to save the money targets, but in fact I just proved that they were unreliable, en passant, and so as a result Governor Bouey dropped that target.

Finance committee  Household debt certainly makes the list of risks that it would face, and of course knowing that—

Finance committee  In the conditions we found ourselves in, I would absolutely. I have only so many tools in the tool kit. In fact, at the Bank of Canada we really have only one, so you can't control everything. Fortunately there's a bigger team that's concerned with financial stability. So in the context, I believe those were the right changes to make.

Finance committee  I did preface my remarks by saying “in the conditions we found ourselves in”. That is something that I think you would look at on a continuous basis depending on the context in which we found ourselves. Certainly for what we see right now and for the foreseeable future, this is the appropriate setting.

Finance committee  I won't comment on the methodologies that credit-rating agencies use. But it is their job, at least—people pay them for this—to look out and see whether the fundamentals of an institution are strengthening or easing back. In the kind of environment we find ourselves, any analyst would ask those questions.

Finance committee  I think the risks that a Canadian bank would face today would be similar to the ones that we face. We believe that the world economy is strengthening. All the signs that we look at suggest that countries are either at bottom or strengthening, which is—

Finance committee  It is obviously an important risk. I'm not going to rank my risks but it is an important risk. It is a risk because we don't think the current situation will last forever. At some point, interest rates are going to rise to a more normal level, and at that time, I hope the people who have those mortgages are fully prepared for that.

Finance committee  Thank you very much for your question. I think it's fairly evident that being a chief economist of any kind of a financial institution is a helpful piece of experience to have. In the case of EDC, it's primarily focused on international economies and how that feeds back to the Canadian export community, but in any case, it still requires a breadth of understanding of monetary policy issues as well.

Finance committee  Like my predecessors, I will not offer a running commentary on the Canadian dollar, where it is and where it should be. I would say though that the EDC forecast is run through a process that I very much respect and find helpful, a very wide-ranging analysis that gives us that kind of prediction that exports really are gathering momentum.

Finance committee  Well, thank you for your question. It is an unusual one. It's caught me a little off guard, I'll admit. Let me say that I worked very hard—and I suppose that culture of hard work I do owe to my parents, who worked very hard and always thought that if I worked hard and did well in school, I could have a better life and create a better life for my children.

Finance committee  I would describe it more as a tool kit. If you're a Sunday hobbyist and you have only half the tools you need, you end up going over to Home Depot to get something extra to finish that job. Along the way, you collect a tool kit. It begins with an intense interest in things monetary—which is what I did all of my research work on during my student days—which was, clearly, why at that time I was preparing myself to come to the Bank of Canada for a permanent position.

Finance committee  The Bank of Canada is answerable to Parliament in the same way as any other government agency, so personally, I don't really see a need for that sort of exemption. As I said, I think it is aligned with the way we behave already. We have an oversight board from the private sector, which gives us great guidance along those lines.

Finance committee  In general I'd say I do agree with that. Given the circumstances we were faced with, we were very fortunate that we had the capacity for households to in effect step up and expand their spending. As I said in my opening remarks, that is what gave us a buffer or cushion underneath the global contraction that we faced.

Finance committee  That is fair to say. I'm a lot older than I look.

Finance committee  I certainly would.