Bank of Canada sounds alarm on growing deficits

Bank of Canada Governor Mark Carney warned on Saturday of the need to tackle growing fiscal deficits around the world, saying some people underestimate the scale of action needed to bring public finances under control.

Carney, speaking to reporters following G20 and IMF meetings in Washington, said the Greek debt crisis had served as a stark reminder to policy makers of the dangers inherent in their massive, globally coordinated stimulus plans, widely credited with preventing a depression.

The Canadian economy could take a hit if other countries were forced to make bigger-than-expected fiscal adjustments or implement exit strategies sooner than anticipated, he said. (more)