Financial System Review - December 2014

December 10, 2014
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The Reports section of the Financial System Review examines selected issues of relevance to the Canadian and global financial systems. The December 2014 issue features two reports on important developments in the financial system: rapid growth and innovation in the market for exchange-traded funds, and the increasing significance of cyber attacks to the operational resilience of financial institutions and financial market infrastructures.
Content Type(s): Publications, Financial Stability Report
December 10, 2014

Exchange-Traded Funds: Evolution of Benefits, Vulnerabilities and Risks

Financial System Review - December 2014 Ian Foucher, Kyle Gray
Ian Foucher and Kyle Gray explain the different types of exchange-traded funds (ETFs), which present both benefits and risks for investors. They discuss ways in which the risk characteristics of certain ETF products could have broader implications for the financial system, and describe the evolution of ETF market structure and regulation in different jurisdictions as authorities try to mitigate risks related to ETFs.
Content Type(s): Publications, Financial System Review articles Topic(s): Financial markets, Financial stability, Market structure and pricing JEL Code(s): G, G1, G14, G18, G2, G20
December 10, 2014

Cyber Security: Protecting the Resilience of Canada’s Financial System

Financial System Review - December 2014 Harold Gallagher, Wade McMahon, Ron Morrow
Harold Gallagher, Wade McMahon and Ron Morrow examine the various sources of cyber attacks and their potential for systemic risk. Against this background, the report highlights efforts being made to protect against cyber-security threats, including individual and collective actions by financial institutions and financial market infrastructures, as well as initiatives by international organizations, regulatory authorities and governments. The authors then describe the coordination, under the Joint Operational Resilience Management program, of private and public sector actions in Canada for managing and testing capabilities during severe operational events such as cyber attacks.
Content Type(s): Publications, Financial System Review articles Topic(s): Financial stability, Financial system regulation and policies, Payment clearing and settlement systems JEL Code(s): G, G2, G20, G23, G28

Bank of Canada says household imbalances remain most important risk to financial stability

Release of the Financial System Review

Press conference following the release of the Financial System Review.

Related Information

International House Price Cycles, Monetary Policy and Risk Premiums

Staff Working Paper 2014-54 Gregory Bauer
Using a panel logit framework, the paper provides an estimate of the likelihood of a house price correction in 18 OECD countries. The analysis shows that a simple measure of the degree of house price overvaluation contains a lot of information about subsequent price reversals.
Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, Housing JEL Code(s): C, C2, E, E4, E43, R, R2, R21

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

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

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

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