Posts

• November 12, 1998

  The LVTS—Canada's Large-Value Transfer System

  Bank of Canada Review - Autumn 1998 James Dingle

  The LVTS is an electronic network for sending and receiving large-value payments. It is expected to become operational in the first half of 1999. Major chartered banks and other large deposit-taking institutions will provide access to the system for their clients in the financial, corporate and government sectors. Canada’s LVTS exceeds world standards for risk control in large-value systems. The author explains how this is achieved through the netting, bilateral and multilateral credit limits, collateral, and loss-sharing procedures used in the event of a default, and, as a last resort, a guarantee by the Bank of Canada. The LVTS gives participating institutions certainty of settlement for their LVTS positions every day, even if one or more participants default. This greatly reduces systemic risk in the financial system. Moreover, the LVTS supports finality of payment; that is, it makes funds unconditionally and irrevocably available to the receiver. Finality is highly desirable when the amount of the payment is substantial, or when exact timing is critical. Since the LVTS will carry the great majority of the value of all payments in Canada, it should be considered the core of the national payments system.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Payment clearing and settlement systems
• November 11, 1998

  A primer on the implementation of monetary policy in the LVTS environment

  Bank of Canada Review - Autumn 1998 Donna Howard

  The author summarizes the objectives and key elements of the framework that the Bank will use to implement monetary policy under the new payments system. The article includes a comparison of the key features of the pre-LVTS framework with that to be used in the LVTS environment. It also features a glossary of terms with respect to the Bank's monetary policy operations.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Monetary policy implementation, Payment clearing and settlement systems

• Evaluating Alternative Measures of the Real Effective Exchange Rate

  Staff Working Paper 1998-20 Robert Lafrance, Patrick Osakwe, Pierre St-Amant

  This paper discusses the merits and shortcomings of alternative price indices used in constructing real effective exchange rate indices and examines the effects of different weighting schemes. It also compares selected measures of the real effective exchange rate in terms of their ability to explain movements in Canadian net exports and real output. The paper […]

  Content Type(s): Staff research, Staff working papers
• November 5, 1998

  Government of Canada Pilot Bond Buyback Program Launch: Operational Framework

  Media Relations Ottawa, Ontario

  On behalf of the Minister of Finance, the Bank of Canada announced today the operational framework for the previously announced pilot bond buyback program.

  Content Type(s): Press, Press releases