Economics
Wilkins Says Pandemic Reveals Limits to Bank of Canada Policy
- Fiscal and regulatory moves will be vital, No. 2 official says
- Central bank kicks off review of its 2% inflation target
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The Bank of Canada’s No. 2 official said one of the lessons of the current pandemic has been to highlight the limits of monetary policy “solving all problems” in a world of low interest rates, as the central bank studies potential changes to its 2% inflation target.
Speaking at a workshop organized by the Bank of Canada on its mandate renewal next year, Senior Deputy Governor Carolyn Wilkins said the future challenges for central banking have become “crystal clear” in recent months as the world economy navigates the crisis -- low interest rates diminish the central bank’s ability to combat future downturns, while also encouraging households to take excessive risks.