May 27, 2022
Posts
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How well can large banks in Canada withstand a severe economic downturn?
We examine the potential impacts of a severe economic shock on the resilience of major banks in Canada. We find these banks would suffer significant financial losses but nevertheless remain resilient. This underscores the role well-capitalized banks and sound underwriting practices play in supporting economic activity in a downturn. -
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May 24, 2022
An Overview of Lynx, Canada’s High-Value Payment System
This document provides an overview of Lynx—Canada’s high-value payment system—and summarizes the system’s design. It explains the development and purpose of Lynx as well as the legal and regulatory framework governing its operation. It also describes the various settlement mechanisms and processes Lynx uses to allow system participants to meet their diverse payment needs while ensuring that risks that arise in the system are managed appropriately. -
Financial Intermediaries and the Macroeconomy: Evidence from a High-Frequency Identification
We provide empirical evidence of effects to the aggregate economy from surprises about financial intermediaries’ net worth based on a high-frequency identification strategy. We estimate that news of a 1% decline in intermediaries’ net worth leads to a 0.2%–0.4% decrease in the market value of nonfinancial firms. -
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May 16, 2022
CARR welcomes RBSL’s decision to cease the publication of CDOR after June 28, 2024
Today, Refinitiv Benchmark Services (UK) Limited (RBSL), CDOR’s regulated administrator, announced the cessation of the publication of CDOR after June 28, 2024. -
Transmission of Cyber Risk Through the Canadian Wholesale Payment System
This paper studies how the impact of a cyber attack that paralyzes one or multiple banks' ability to send payments would transmit to other banks through the Canadian wholesale payment system. Based on historical payment data, we simulate a wide range of scenarios and evaluate the total payment disruption in the system. -
May 12, 2022
The perfect storm
Deputy Governor Toni Gravelle discusses the commodity price shock and its implications for the Canadian economy and monetary policy. -
Nonparametric Identification of Incomplete Information Discrete Games with Non-equilibrium Behaviors
This paper jointly relaxes two assumptions in the literature that estimates games. These two assumptions are the parametric restriction on the model primitives and the restriction of equilibrium behaviors. Without imposing the above two assumptions, this paper identifies the primitives of the game.