It's an extremely important question.
I'll give you, in a moment, a couple of examples of issues to consider, but let me start by saying, in response to an earlier question, that we can analyze and do research, and then it's our responsibility to make public that analysis in a constructive way so that those who are responsible for either regulating or for legislating these issues can make informed judgments.
In that regard, I think it's our responsibility, through our financial stability report, through speeches, and through other mechanisms and appearances, to raise with you the issues that, in our judgment, rise to a macro level; they'll have an impact on the economy.
What are some of those issues right now? One of them is the procyclicality of capital standards. We saw it on the way up. We're seeing some of the issues on the way down, now, in that institutions have capital buffers that they can't necessarily use. In other words, they can't necessarily expand lending to the extent to which they might otherwise, because the floor is not the minimum; it's a higher level.
There are a variety of aspects that are technical--but important in terms of treatment of markets and measurement of risk in markets--that add to that procyclicality. Firms will hold more capital in a recession, or strive to hold more capital in a recession, than they might necessarily have to do, which will make the recession worse. That's one example.
The second thing that's extremely important, and you referenced it obliquely, is the securitization market. It is extremely important globally that securitization gets relaunched properly. Given the challenges with the credibility of public ratings--the agencies are trying to address it, but there are still challenges--careful thought needs to be given to potential credit enhancements or other mechanisms, including transparency, to relaunch securitization as a matter of urgency; less so in Canada, more so globally, but there's no reason why Canada shouldn't lead on an issue such as this, which would be net helpful for our system.
The third issue, which we're looking at in great detail, is core funding markets, repo markets. As one example, how do you ensure...? One part of it is what's our role as a liquidity provider in those markets? But there are also regulatory tax and other accounting issues around it. You have to make sure that those markets stay open, because that's how you avoid a crash on that.
On pension issues, accounting, Mr. Jenkins can talk at length and in a very informed manner. There are clear issues.
The last thing, and I'll end with this, is that with regard to our role, as I said, it's our job to do some analysis and highlight what we see as the most important issues. We're happy to share that analysis. We'd be more than pleased to. It's also our job to work effectively with the other agencies, both federal and provincial, to ensure that changes are taken.