Bank of Canada still confident of outlook after G7

Sat Apr 25, 2009 9:36pm BST
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By Louise Egan

WASHINGTON, April 25 (Reuters) - Bank of Canada Governor Mark Carney was just as confident on Saturday of his estimates for the Canadian economy as he was before discussing the U.S. bank stabilization plan with his G7 colleagues on the weekend.

The central bank said on Thursday that the key threat to Canada's economic recovery, projected to start in the fourth quarter, would be a delay in removing bad debt from the balance sheets of the world's major banks.

Finance ministers and central bankers from the Group of Seven industrialized nations discussed U.S. and European plans to tackle this issue in Washington on Friday.

"There is nothing I heard this weekend that has made me less confident in our outlook," Carney said in a briefing with Canadian reporters in Washington.

But he stressed that failure by U.S. Treasury Secretary Timothy Geithner to successfully implement the plan remains the number one risk to the Canadian economy.

"There are still implementation risks. We'll find out like everybody else how that progresses," he said.

Carney acknowledged there was some controversy among G7 policy-makers about the International Monetary Fund's projection that global write-downs of toxic debt in the United States, Europe and Japan could reach $4.1 trillion.

"There was some lively discussion this weekend about those estimates," Carney said.  Continued...

 
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