Volume 94, Issue 27

Wednesday, October 18, 2000


NEWS

USC clubs in hot water

Bank governor opens vault of history

Big wheels not turning

Mount Trudeau falling in a landslide

Campus Briefs

Gore and Bush charge to elections

Corroded Disorder

Bank governor opens vault of history

By Chris Lackner
Gazette Staff



Yesterday was a big day on campus – big banking, big whigs and big crowds.

Gordon G. Thiessen, governor of the Bank of Canada, spoke to a large crowd yesterday at Western's Social Sciences Centre. Thiessen's speech centered on the evolution of monetary policy in Canada between 1935 and the year 2000.

Thiessen said there has been a transformation in the way monetary policy is conducted in Canada and other nations, during those 65 years. One of the key lessons financial institutions, including the BoC, have learned, is to eliminate complex operating procedures and deal with a simple policy approach, he added.

The BoC currently strives to generate open communications with the public concerning Canadian monetary status, Thiessen said. "Monetary price is more effective when the public knows what the bank is doing and why," he added.

Thiessen explained the developmental objectives for the BoC have focussed on ensuring price stability and a floating Canadian exchange rate. "Today's monetary policy works with the markets rather then against them."

Although the central bank's independence and accountability have been clearly defined, Thiessen said the ultimate responsibility for monetary policy rests with the federal government.

He also noted he had little fear of globalization's effect on the Canadian economy. He said Canada's close proximity to the economic power-house of the United States has forced the nation to deal with issues of the economic globalization long before the rest of the planet.

During the question period, Thiessen stressed the importance of Canada maintaining an individual monetary policy, instead of fixing the Canadian dollar to the American dollar to create a dual currency, as some economists have suggested. "We can't have flexibility with a link in currency."

Thiessen refused to speculate over criticisms that the Liberal government has mis-handled funding and added the prospect of a federal election makes it an inappropriate time to comment on the government's economic performance.

"He's an excellent speaker who provided a detailed, historical perspective," said Chris Atkinson, a fourth-year economics student who was in attendance.

"It's a very good sign for high-ranking officials to be open and accountable," said Josh Morgan, Social Science Council president.

Western president Paul Davenport, said during Thiessen's tenure as governor between 1995 and 2000, Canada has seen economic growth, monetary stability and low employment rates.


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