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Path to Economic Recovery Filled With Risks That Need to Be Managed, Macklem Says

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President Donald Trump’s White House physician said in a memo Wednesday that the president has been free of symptoms for a full day and that his blood tests show the presence of antibodies for SARS-CoV-2, the scientific name for the CCP (Chinese Communist Party) virus. “Of note today, the President’s labs demonstrated detectable levels of SARS-CoV-2 IgG antibodies from labs drawn Monday, October 5th; initial IgG levels drawn late Thursday night were undetectable,” Dr. Sean P. Conley wrote. The presence of antibodies means Trump’s immune system has been fighting the virus, although more tests would be needed to determine if the president remains infectious. Trump, in a tweet on Monday evening after returning to the White House from the Walter Reed Army Medical Center, suggested he may have developed immunity to…

Path to Economic Recovery Filled With Risks That Need to Be Managed, Macklem Says

OTTAWA鈥擳he governor of the Bank of Canada says managing the risks from the pandemic is more critical than ever, saying it is key to a recovery and the stability of society.

Tiff Macklem says in a Thursday morning speech that a second historic recession in just over a decade underlines how managing financial system risks matters to the livelihoods of Canadians.

And he identifies a few of the risks the bank will be keeping an eye on, including how many companies and households can鈥檛 keep up with debt and mortgage payments.

Companies and households have been given a financial lifeline during the pandemic, including deferrals on mortgage payments, a drop in the central bank鈥檚 key policy rate, and billions in federal aid and credit programs.

Macklem says in the speech to the Global Risk Institute that policy-makers need to navigate the potholes on the road to recovery, 聽including new ones created by the pandemic.

Canada has managed the crisis better than many countries, he says. Macklem notes the country鈥檚 risk-cautious culture that is not usually celebrated, but it protected the economy during the financial crisis a decade ago and has helped during the current recession.

Still, Macklem says overwhelming uncertainty weighs on the Canadian economy and country writ large.

“The COVID-19 pandemic has made it painfully clear that how well we manage risks has a huge impact on our well-being,” Macklem says in the text of his speech, released ahead of time to journalists.

“Globally, I don鈥檛 think it鈥檚 an exaggeration to say that the quality of risk management will increasingly influence the success and stability of societies.”

The speech comes as the country heads into an expected second wave of COVID-19, with case counts rising and the threat of lockdowns looming over businesses and workers.

Widespread lockdowns in March and April led to historic plunges in the labour market, with three million people out of work and 2.5 million more working less than half their normal hours.

The country has recouped about two-thirds of the jobs lost, but Macklem says it will be a long time before the losses in jobs and work hours return to pre-pandemic levels.

Federal spending has skyrocketed to provide aid to hard-hit companies, and put a financial floor under Canadians whose incomes crashed. The bank鈥檚 key interest rate quickly dropped to 0.25 percent and will stay there until a recovery is well underway.

Macklem says the effect of the lower-interest rate environment created will require insurance companies and pension funds to adjust, and the path the policy rate takes will eventually have an impact on financial system vulnerabilities.

“Without the fiscal and monetary policy actions, the economic devastation of the pandemic could have been much, much worse,” Macklem says in the text of his speech.

“As much as a bold policy response was needed, it will inevitably make the economy and financial system more vulnerable to economic shocks down the road.”

But it鈥檚 not the only risk Macklem warns about, pointing to the long-term impacts climate change will have on the financial system and domestic economy.

Physical and financial risks from more frequent and severe weather events, including the damage to infrastructure and homes, will almost certainly grow, he says.

Business face risk from shifts in earnings and expenses as the country transitions to a low-carbon economy that need to be properly managed, Macklem says. Otherwise, he says, climate change could lead to heavy losses for financial institutions or threaten the stability of the country鈥檚 financial system.

By Jordan Press

Focus News: Path to Economic Recovery Filled With Risks That Need to Be Managed, Macklem Says

Former Minneapolis Officer Charged in George Floyd’s Death Released From Jail

Former Minneapolis police officer Derek Chauvin was released from jail after posting $1 million bail, coming months after he was seen kneeling on the neck of George Floyd before his death, setting off nationwide riots and protests. Chauvin was charged with second-degree murder, third-degree murder, and manslaughter in Floyd’s death. He was released from the Oak Park Heights jail, where he was being held since late May, said a Minnesota Department of Corrections spokesperson to Fox9. The Hennepin County Sheriff’s Office, in a notice of release (pdf) on Wednesday, said Chauvin was released after he paid a $1 million bond and is now required by law to appear in court in March 2021. A court document (pdf) showed that he paid the bond on Wednesday. Following Floyd’s death on Memorial Day, Attorney General…