Posts

• June 23, 2005

  Bank Failures and Bank Fundamentals: A Comparative Analysis for Latin America and East Asia during the 1990s

  Financial System Review - June 2005 Marco Arena

  Content Type(s): Publications, Financial System Review articles
• June 23, 2005

  Financial System Review - June 2005

  

  The financial system makes an important contribution to the welfare of all Canadians. The ability of households and firms to confidently hold and transfer financial assets is one of the fundamental building blocks of the Canadian economy.

  Content Type(s): Publications, Financial Stability Report
• June 22, 2005

  Estimating the Impact of Monetary Policy Surprises on Fixed-Income Markets

  Bank of Canada Review - Summer 2005 Jason Andreou

  In the interest of better understanding the impact of the Bank of Canada's policy actions on bond and bill yields, Andreou assesses the impact of policy-rate announcements on short and long bonds over the period 1996 to 2004. To aid the analysis, policy actions are decomposed into expected and surprise components. He also examines whether the introduction of fixed announcement dates (FADs) has affected these results, including markets' perceptions. The main finding is that unexpected policy actions by the Bank have a significant effect on market rates at the shorter end of the yield curve, with the effect dissipating as the maturity increases. A second finding, that the impact on longer-term interest rates of a surprise action by the Bank has diminished since the introduction of the FADs, suggests that the Bank's long-term policy goals are well understood and credible.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Credibility, Financial markets, Monetary policy and uncertainty
• June 18, 2005

  Recent Trends in Canadian Defined-Benefit Pension Sector Investment and Risk Management

  Bank of Canada Review - Summer 2005 Eric Tuer, Elizabeth Woodman

  Defined-benefit (DB) pension plans account for the majority of employer pension fund assets. In recent years, a number of DB plans have become underfunded, in sharp contrast to the 1990s, when many plans had large actuarial surpluses. The deterioration in the financial health of DB plans has underscored various longer-term structural issues that could make it increasingly difficult for plan sponsors to manage the financial risks of these plans. Tuer and Woodman examine how funding deficits, a greater focus on plan liabilities, a low yield environment, and changing investment beliefs are influencing investment decisions in the Canadian DB pension sector. They review the funding of DB plans, changing views on the equity-risk premium, and the shift towards liability-centred approaches to investment and how these developments are affecting pension sector investment. They also consider additional influences on the pension sector, including the limited supply of long-term bonds, the elimination of the foreign-property rule, and the movement towards fair-value accounting and a financial-economics approach to actuarial valuation, as well as their implications for financial markets.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Financial institutions, Recent economic and financial developments
• June 15, 2005

  Governor Dodge Discusses How Canada Is Adjusting to Change

  Media Relations Winnipeg, Manitoba

  Bank of Canada Governor David Dodge said today that Canadians are making the adjustments that will help our economy thrive in a changing global economic environment.

  Content Type(s): Press, Press releases
• June 15, 2005

  Adjusting to Change

  Remarks David Dodge Winnipeg Chamber of Commerce Winnipeg, Manitoba

  Change is the central theme of my remarks today. First, I will talk about some of the changes that have taken place at the Bank of Canada over its 70-year history. Then, I'll talk about some of the changes that are currently taking place in the global economy, as well as how we see our economy - across Canada and right here in Manitoba - adjusting to these changes.

  Content Type(s): Press, Speeches and appearances, Remarks
• June 9, 2005

  How the Canadian Economy Is Adjusting to Global Forces

  Remarks David Dodge Canadian Chamber of Commerce in Japan Tokyo, Japan

  Rapid growth in emerging-market economies is driving up demand for commodities, and that has pushed up world prices for oil and many non-energy commodities. Meanwhile, productivity improvements in some countries and a competitive world environment are lowering the prices for some consumer goods, communications services, and computer equipment.

  Content Type(s): Press, Speeches and appearances, Remarks
• June 2, 2005

  Monetary Policy and the Exchange Rate in Canada

  Remarks David Dodge Canada China Business Council Beijing, China

  Canada's experience is interesting and potentially insightful for two important reasons. First, Canada has more experience with a flexible exchange rate than almost any other country.

  Content Type(s): Press, Speeches and appearances, Remarks

• Lines of Credit and Consumption Smoothing: The Choice between Credit Cards and Home Equity Lines of Credit

  Staff Working Paper 2005-18 Shubhasis Dey

  The author models the choice between credit cards and home equity lines of credit (HELOCs) within a framework where consumers hold lines of credit as instruments of consumption smoothing across state and time.

  Content Type(s): Staff research, Staff working papers Topic(s): Credit and credit aggregates JEL Code(s): D, D1, D8, D81

• Risk Perceptions and Attitudes

  Staff Working Paper 2005-17 Miroslav Misina

  Changes in risk perception have been used in various contexts to explain shorter-term developments in financial markets, as part of a mechanism that amplifies fluctuations in financial markets, as well as in accounts of "irrational exuberance."

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Financial markets JEL Code(s): D, D8, D81, D84, G, G1, G12