Finance committee  First, you reference a proposal that we do not have, so by definition you can't read that into it. But if you're talking about a macro-prudential approach, no, one wouldn't focus in on a specific security unless that security itself were a major part of the capital markets, such as, for example, the GSE bonds in the United States.

Finance committee  There's no question that the issue of the perimeter of regulation, if I may, catching those institutions that have potentially systemic implications, such as hedge funds in some jurisdictions and such as, as it turned out in Canada, arguably the institutions that created the vehicles of non-bank asset-backed commercial paper, which ended up being quasi-systemic in Canada...that the ability, from time to time, of the financial industry to innovate around the regulatory net has to be addressed.

Finance committee  I'll speak for us. When the outlook changes, we can change policy. We do that in a transparent way. Since we last met in January, as it became apparent the situation had deteriorated, we adjusted policy in March. Fiscal policy is not as nimble as monetary policy is, so the timeline of adjustment of forecasts is necessarily different.

Finance committee  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.

Finance committee  Thank you for the question. We really do look to apply our inflation-targeting framework. We look at the lags on monetary policy, which tend to run from four to six quarters out. We look at the scale of the difference between the potential of the economy and where the economy is operating.

Finance committee  I'll start briefly. We are expecting a relatively significant price adjustment in houses in Canada this year, in the high single-digit order of magnitude. It's under way, and it's concentrated largely in western Canada. A lot of progress has been made there. What we've seen is a slowdown in starts in Canada such that they're running below....

Finance committee  Very quickly, the term “toxic assets”, at least in this round of financial crises, originated and was applied to a range of structured products. They included those based on subprime mortgages, but much more broadly, they were effectively related to broken markets, structured securitization markets that no longer functioned well.

Finance committee  I want to clarify that the impact of our decision last week was to improve financial conditions. Corporate bond yields as a whole went down 14 basis points; the curve out to one year went flat to 25 basis points, taking out between 10 and 20 basis points, depending on the maturity.

Finance committee  The curve as a whole has, at the short end, come in since the start of the year, since January, which has had an impact, and we've had pass-through both into the prime rate, into bankers' acceptances, which are very important short-term financing for corporations, and into mortgages steadily, as we've gone through this year.

Finance committee  I didn't catch the last bit.

Finance committee  Just to be clear on the definitions, quantitative easing, first and foremost, involves the purchase of assets, and those assets can be either government bonds or private securities. Those purchases, to make it quantitative, are financed by the creation of new central bank reserve, central bank money.

Finance committee  Thank you, Mr. Kramp. In terms of the comparables, I will give you two. One, there is a small set of central banks--the Riksbank in Sweden and the Norges Bank in Norway are two examples--that provide a path every time they make a decision for their overnight interest rate, all the way out, if you will.

Finance committee  I would like to generalize it so as not to prejudice any discussions, but the adjustment to our potential output does reflect an expectation that in the manufacturing sector significant capacity will be reduced.

Finance committee  I'll answer very quickly. There is a broad range of sources for bank funding, including deposits, the BA market, longer-term bonds, and the IMP program of the government. What's important to recognize as well is that those costs and those spreads went up quite sharply in the fall with the crisis; they have been coming down quite considerably since the turn of the year, which is part of the implication for it.

Finance committee  Look, I think the bank--and I will take the liberty of speaking for my predecessor as well--has always been focused on its 2% inflation target. That's the objective. All these factors, whether it's the speed rate of the economy, the influence by productivity, or whether it's the exchange rate, commodity prices, financial conditions, a variety of things, they matter in the conduct of monetary policy for their impact on inflation, and monetary policy is adjusted to achieve that 2% total CPI inflation target.