While receiving an award from at the Office for Partnerships for Advanced Skills’ Annual Visionary Seminar in Ottawa, David Dodge, governor of the Bank of Canada, stressed the importance of financial market regulation.

The Visionary Award was presented to Dodge by Carol Stephenson, OPAS board chairwoman and Dean of the Richard Ivey School of Business at the University of Western Ontario.

Dodge’s speech focused on globalization and its effects. And, he particularly zeroed in on the importance of the financial sector in a globalized economy. “Technological advances and increased openness have led to greater flows of capital and new methods of financing development. Capital flows have become global, as investors look across national boundaries for the best opportunities for their savings,” he said. “This has benefited not only countries that receive investment, but also allowed our aging society to generate higher returns on its savings, both private and public.”

One of the consequences of this increased openness, Dodge noted, is greater risk. “We have all seen what can happen when investment flows into countries with unreliable or underdeveloped financial sectors. We have also seen what can happen when investors send large capital flows abroad without doing their due diligence first. So seizing the opportunities that have come from being more open has required more effective risk management,” he said. “For savings to flow smoothly around the world, the financial sector has had to evolve, inventing new instruments that facilitate appropriate investments.”

He said that governments, central banks and international organizations, such as the IMF, have collaborated to mitigate risks in the last few years. “But obviously, huge challenges remain both for private financial institutions and for the public sector—nationally and internationally,” he noted. “The public sector in every country must take the necessary steps to ensure that its financial sector is appropriately regulated. And countries need to continue to work together to develop and implement best practices to promote financial stability. Once again, with the trend towards increasing globalization, the importance of the financial sector and the need to ensure that it is appropriately regulated will become even greater.”

Dodge also encouraged his audience to think globally, act globally, and experience the world’s diversity. And, he said, “To work efficiently, individuals and businesses need a well-functioning public sector and the appropriate framework that provides the right incentives. The public sector has a responsibility to understand how businesses and individuals work in order to provide the appropriate setting and support. While this applies to all parts of the public sector, it is perhaps most critical for those who are responsible for the country’s economic and financial framework—including us at the Bank of Canada.”

“So I hope that you will take my three messages to heart: have a global perspective, recognize the importance of the financial sector, and understand the crucial role of the public sector. With the global economy continuing to evolve, it will become increasingly important to act on these ideas, no matter where your career path leads you,” he concluded.