Unlike many central banks, Canada’s monetary authority has little regulatory power over the banking system. It does have a bully pulpit, however.
In 2001, the Bank of Canada introduced the Financial System Review (FSR) as an outlet for its views on lenders and credit markets. For years, only the most dedicated of the Bank of Canada’s professional observers read the FSR. Yet it was always there—twice a year, in June and December—to send a message if policy makers felt the need to do so.
Last week, Bank of Canada Governor Stephen Poloz felt such a need.
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