On August 8, 2024, the Bank of Canada announced it had enlisted three external experts to independently assess its ongoing internal review of the exceptional policy measures taken during the COVID-19 pandemic.
This review will include an in-depth analysis of programs used in stabilizing the Canadian economy during the COVID-19 pandemic global crisis.
The experts appointed by the Bank’s Governing Council are:
- Pablo Hernández de Cos: Former Governor of the Bank of Spain and former Chair of the Basel Committee on Banking Supervision.
- Kristin J. Forbes: Professor at MIT’s Sloan School of Management and former member of the Bank of England’s Monetary Policy Committee.
- Trevor Tombe: Economics Professor at the University of Calgary and Director of Fiscal and Economic Policy at The School of Public Policy.
According to Bank of Canada Governor Tiff Macklem, this independent assessment is crucial for refining the Bank’s response to future crises.
The internal review, supported by the expert assessment, will evaluate the context, timing, and overall effectiveness of the Bank’s actions during the pandemic. It will also aim to identify key lessons and questions that could inform the Bank’s approach should similar extraordinary measures be needed again.
The review will assess:
- Market Functionality Programs: Initiatives that ensured financial markets continued operating smoothly during the pandemic.
- Quantitative Easing: A strategy where the Bank of Canada bought large amounts of government bonds to inject money into the economy, lowering interest rates and encouraging lending and investment.
- Extraordinary Forward Guidance: Clear communication from the Bank about the future direction of interest rates and monetary policy, intended to influence economic expectations and behaviour.
Both the internal review and the external assessment are expected to be published by the end of the year. This review will provide insight into how the Bank of Canada’s pandemic-era policies influenced economic stability, interest rates, and credit markets.
