Thank you, Mr. Chair, and thank you to you both.
Governor, I want to ask you about the overall health of the global banking system, specifically relating to loans and debt repayment. Just a few days ago the International Monetary Fund issued the following statement:
...the resilience of banks may be tested in the face of a sharp slowdown in economic activity that may turn out to be more severe and lengthy than currently anticipated.
As firms become distressed and default rates climb higher, credit markets may come to a sudden stop, especially in risky segments like high yield, leveraged loan, and private debt markets.
In addition to the IMF, The Economist magazine has written very recently that there are deep concerns about the stability of the European banking system, particularly because of the concern around loans and debt repayment. It mentions in particular Deutsche Bank, and beyond Europe, Chinese banks.
Governor, what are your thoughts on these perspectives and the stability of the global banking system? What might that imply for Canada going forward in the months ahead?