Financial System Review - June 2017

June 8, 2017
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This issue of the Financial System Review reflects the Bank’s judgment that household indebtedness and housing market imbalances–the most important vulnerabilities for the Canadian financial system–have moved higher over the past six months. However, the financial system remains resilient, and macroeconomic conditions continue to improve. Other vulnerabilities discussed in this FSR are fragile fixed-income market liquidity and the capacity of an interconnected financial system to mitigate cyber threats.
Content Type(s): Publications, Financial Stability Report
June 8, 2017

Using Market-Based Indicators to Assess Banking System Resilience

Financial System Review - June 2017 Cameron MacDonald, Maarten van Oordt
This report reviews the use of quantitative tools to gauge market participants’ assessment of banking system resilience. These measures complement traditional balance-sheet metrics and suggest that markets consider large Canadian banks to be better placed to weather adverse shocks than banks in other advanced economies. Compared with regulatory capital ratios, however, the measures suggest less improvement in banking system resilience since the pre-crisis period.
Content Type(s): Publications, Financial System Review articles Topic(s): Financial institutions, Financial markets, Financial stability JEL Code(s): G, G0, G01, G1, G10, G2, G21
June 8, 2017

Canada’s International Investment Position: Benefits and Potential Vulnerabilities

Financial System Review - June 2017 Gabriel Bruneau, Maxime Leboeuf, Guillaume Nolin
While greater global financial integration is beneficial, the authors discuss how foreign capital inflows can also facilitate the buildup of domestic vulnerabilities and potentially lead to destabilizing reversals. Canada’s current international investment position is typical of advanced economies and will likely continue to act as an economic stabilizer. However, the growth and composition of Canada’s international investment position warrant continued monitoring.
Content Type(s): Publications, Financial System Review articles Topic(s): Balance of payments and components, Financial stability, International financial markets JEL Code(s): F, F2, F21, F3, F32, F34, F36, F4, F6
May 25, 2017

Project Jasper: Are Distributed Wholesale Payment Systems Feasible Yet?

Financial System Review - June 2017 James Chapman, Rodney J. Garratt, Scott Hendry, Andrew McCormack, Wade McMahon

This report describes a joint endeavour between public and private sectors to explore a wholesale payment system based on distributed ledger technology (DLT). They find that a stand-alone DLT system is unlikely to be as beneficial as a centralized payment system in terms of core operating costs; however, it could increase financial system efficiency as a result of integration with the broader financial market infrastructure.
Content Type(s): Publications, Financial System Review articles Topic(s): Digital currencies and fintech, Financial system regulation and policies, Payment clearing and settlement systems JEL Code(s): E, E4, E42, E5, E58, G, G2, G28
Stephen S. Poloz and Carolyn Wilkins - carousel image

Press Conference

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

Press Release

Household indebtedness and housing market imbalances—the most important vulnerabilities for the Canadian financial system—have moved higher over the past six months, the Bank of Canada said today in its Financial System Review (FSR).

Content Type(s): Press, Press releases

Opening Statement

June 8, 2017
Opening statement -

Press conference following the release of the Financial System Review.

Content Type(s): Press, Speeches and appearances, Opening statements
Topic(s): Credit and credit aggregates, Financial stability, Financial system regulation and policies, Housing, Regional economic developments, Sectoral balance sheet

The 2-minute FSR