Financial stability, Financial system regulation and policies
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May 6, 2016
Stress Prevention: Central Banks and Financial Stability
Deputy Governor Lawrence Schembri discusses central banks and the maintenance of financial stability. -
Early Warning of Financial Stress Events: A Credit-Regime-Switching Approach
We propose an early warning model for predicting the likelihood of a financial stress event for a given future time, and examine whether credit plays an important role in the model as a non-linear propagator of shocks. -
Retail Order Flow Segmentation
In August 2012, the New York Stock Exchange launched the Retail Liquidity Program (RLP), a trading facility that enables participating organizations to quote dark limit orders executable only by retail traders. -
Should Monetary Policy Lean Against Housing Market Booms?
Should monetary policy lean against housing market booms? We approach this question using a small-scale, regime-switching New Keynesian model, where housing market crashes arrive with a logit probability that depends on the level of household debt. -
Opaque Assets and Rollover Risk
We model the asset-opacity choice of an intermediary subject to rollover risk in wholesale funding markets. Greater opacity means investors form more dispersed beliefs about an intermediary’s profitability. -
Asset Encumbrance, Bank Funding and Financial Fragility
In this piece we show that a limit on the level of asset encumbrance and minimum capital requirements are effective tools for minimizing the incentive for banks to take excessive risk. -
April 5, 2016
China’s Great Transition: What It Means for Canada
Senior Deputy Governor Carolyn Wilkins discusses the risks and opportunities for Canada of China’s economic transition. -
Dating Systemic Financial Stress Episodes in the EU Countries
This paper introduces a new methodology to date systemic financial stress events in a transparent, objective and reproducible way. The financial cycle is captured by a monthly country-specific financial stress index. -
Measuring Systemic Risk Across Financial Market Infrastructures
We measure systemic risk in the network of financial market infrastructures (FMIs) as the probability that two or more FMIs have a large credit risk exposure to the same FMI participant.