Solutions to the global credit crisis must be found at the international level, Bank of Canada deputy governor Pierre Duguay said Thursday.

“Investor and public confidence has been badly shaken, but will recover with the timely implementation of ambitious plans in some major countries to address toxic assets and to recapitalize financial institutions,” Duguay told the House of Commons finance committee on Thursday.

Duguay acknowledged that the Canadian economy is feeling the effects of the global turmoil and recession. And he noted that authorities have put a lot of fiscal and monetary stimulus in place — in Canada and globally — to support the recovery.

However, he said “stabilization of the global financial system remains a precondition for the global and Canadian economic recoveries.”

If international measures are not timely, bold, and well-executed, Canada’s economic recovery will be will be both delayed and weaker, he said.

Duguay noted the Canadian banks have not been materially affected by the financial crisis.

He said the Bank of Canada’s latest figures show total household credit in January rising 9.6% over last year and limited deceleration of business credit.

“Accelerating growth in bank lending has helped to offset a contraction in market financing,” Duguay said.

IE