Financial System Review - June 2014

June 12, 2014
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Available as: PDF
The Reports section of the Financial System Review examines selected issues of relevance to the Canadian and global financial systems. The June 2014 issue features three reports on financial system initiatives: making financial benchmarks more robust; implementing the stronger Basel III capital and liquidity framework for banks; and using stress tests to assess financial system risks.
Content Type(s): Publications, Financial Stability Report
June 12, 2014

Reforming Financial Benchmarks: An International Perspective

Financial System Review - June 2014 Thomas Thorn, Harri Vikstedt
Thomas Thorn and Harri Vikstedt examine the efforts being taken internationally and in Canada to enhance the governance and integrity of financial benchmarks. The report provides an overview of how interbank interest rate benchmarks are set and describes the weaknesses in the process that were exposed by the financial crisis. It also explains recent policy developments designed to make global and Canadian interbank benchmarks more robust.
Content Type(s): Publications, Financial System Review articles Topic(s): Financial markets, Financial system regulation and policies, Recent economic and financial developments JEL Code(s): G, G1, G11
June 12, 2014

Making Banks Safer: Implementing Basel III

Financial System Review - June 2014 Éric Chouinard, Graydon Paulin
Éric Chouinard and Graydon Paulin review the progress to date in implementing Basel III, the new framework of global regulatory standards for the banking sector developed by the Basel Committee on Banking Supervision. The report highlights the expected net benefits of implementing Basel III, as well as the challenges in ensuring international consistency in measuring the risk-weighted capital of banks. It includes a discussion on how implementing Basel III has affected the banking system in Canada and other important jurisdictions, and demonstrates the need for ongoing assessment of the effects on the financial system and the macroeconomy.
Content Type(s): Publications, Financial System Review articles Topic(s): Financial institutions, Financial system regulation and policies JEL Code(s): G, G2, G28
June 12, 2014

Stress Testing the Canadian Banking System: A System-Wide Approach

Financial System Review - June 2014 Kartik Anand, Guillaume Bédard-Pagé, Virginie Traclet
Stress testing is an important tool used by financial authorities and entities around the world to evaluate potential risks to the financial system. Kartik Anand, Guillaume Bédard-Pagé and Virginie Traclet discuss different stress-testing approaches, with emphasis on the innovative and analytically rigorous model developed by the Bank of Canada: the MacroFinancial Risk Assessment Framework (MFRAF). They also present the stress-test results obtained in the context of the 2013 Canada Financial Sector Assessment Program led by the International Monetary Fund, including the important contributions made by the use of MFRAF in the exercise.
Content Type(s): Publications, Financial System Review articles Topic(s): Financial institutions, Financial stability JEL Code(s): C, C6, C63, G, G0, G01, G2, G21

Release of the Financial System Review

Press conference following the release of the Financial System Review.

Bank of Canada’s enhanced financial stability framework shows system is robust, housing vulnerabilities remain

Financial System Review - Press Conference (Video) - June 2014

Press conference by Governor Stephen S. Poloz and Senior Deputy Governor Carolyn Wilkins (11:15 (ET) approx.)

Financial System Review - Press Conference (Audio) - June 2014

Press conference by Governor Stephen S. Poloz and Senior Deputy Governor Carolyn Wilkins (11:15 (ET) approx.)