Finance committee  Well, I think there are two things--

Finance committee  --if I may. One is the funding costs of banks and the increase of the spread. Ultimately, it's a product of the recession, but where bank funding costs and bank spreads went in shorter term markets.... I'm going to get technical, but it is the finance committee. If you look at, for example, the spread between the CDOR and the OIS rates--so where the market expects our interest rate to be and where banks are borrowing in the interbank market--those have not returned to historic norms.

Finance committee  Well, it's a pretty long list, actually, unfortunately. I would draw your attention to chart 19 on page 21. In that chart, the relevant line is unit labour costs in Canada and the United States. “Unit labour costs, Canada (in US$)” is the green line going up, and the blue line is “Unit labour costs, United States (in US$)”.

Finance committee  Thank you for your question. This is an important point. First of all, with regard to the growth rate in Canada, the numbers of the Bank of Canada and those of the IMF are somewhat different. However, the interpretation of the numbers is the same. This year, we are predicting that Canada will have the highest growth rate of all of the G7 countries.

Finance committee  Is that clear enough?

Finance committee  Very quickly, there are two factors. The slowing in the United States is a factor, but it's also that we reach our rate of potential growth, so the economy is equilibrated. If we want to grow faster.... It's unlikely we will improve our demographic profile, so it's a question of productivity.

Finance committee  Thanks for the question. I would say first off that in terms of the implications for Canadians and for monetary policy, we take this into account; we take the spread between our rates and the rates that Canadians are paying, whether it's on prime borrowings or on mortgage rates--not just what's posted, which is what is reported, but what they're actually paying.

Finance committee  Yes. I--

Finance committee  Yes. I'm conscious of your time. And that is the strategy, first and foremost. The core of this is that we need more and better capital. We need leverage ratios on an international scale, as we have in Canada. We also need to make some other measures, and we can talk about them if the committee is interested, but I would say--

Finance committee  We are making progress on this. It's going to be very intensive between now and the November summit in Korea, which is the target for having this package together. We're available any time to go into detail on these issues if the committee is interested, but I would say that the success of this past weekend was to put the distraction of the bank tax off to the side and re-establish the focus on exactly what you're talking about.

Finance committee  The most ambitious variant of that tax is to build up a fund to anticipate future losses, which in our view is unacceptable, because the point is that the losses stay in the sector; the sector recapitalizes itself. And you create tremendous moral hazard by setting up this pot. Finally, that pot probably isn't going to be there in a pinch.

Finance committee  Thank you, Mr. Carrier. I would simply like to clarify one thing. Are you talking about the same thing as Mr. Pacetti and Mr. Mulcair, or are you talking about the Tobin tax? You are rather talking about a Tobin tax?

Finance committee  Unfortunately, the document that we received from the International Monetary Fund, the IMF, was provided in English only. It is their fault and not that of the Bank of Canada. With regard to the Tobin tax, I must say that the IMF advises that it not be adopted. I have just a quick quote, which says that the financial transaction tax, and that's a Tobin tax, is not the best instrument for these purposes.

Finance committee  In my opinion, this would not be a good idea. It was a mistake to grant this mandate to a rating agency. Several official mandates have been given to rating agencies. To be quick, in a variety of regulations, including capital regulations, there's an ability to use ratings, which effectively reinforce the franchise of these agencies, and so there is a desire, and also in investment regulations and other things from the officials' side....

Finance committee  Yes, in order to.... But the mandated use of ratings, in order to have...if it's going to be private, it should be truly private and survive not by fiat from the public sector, but because of the effectiveness of their opinions, which reinforce the original business model of these entities.