Posts

• Stablecoins and Their Risks to Financial Stability

  Staff Discussion Paper 2022-20 Cameron MacDonald, Laura Zhao

  What risks could stablecoins pose to the financial system? We argue that the stabilization mechanisms of stablecoins give rise to the risk of confidence runs, which can propagate to broader cryptoasset markets and the traditional financial sector. We also argue that stablecoins can contribute to financial stability risks by facilitating the buildup of leverage and liquidity mismatch in decentralized finance. Such risks cannot be addressed by ensuring the price stability of stablecoins alone. Finally, we explore the potential implications of stablecoins for the current system of bank-intermediated credit and for monetary policy.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Digital currencies and fintech, Financial institutions, Financial markets, Financial stability, Financial system regulation and policies JEL Code(s): E, E4, E42, E44, E5, E58, G, G2, G23
• November 23, 2022

  Opening Statement before the House of Commons Standing Committee on Finance

  Opening statement Tiff Macklem House of Commons Standing Committee on Finance Ottawa, Ontario

  Content Type(s): Press, Speeches and appearances, Opening statements
• November 22, 2022

  Tracking the financial vulnerabilities of households and the housing market

  The Bank of Canada is publishing a new set of indicators of financial vulnerabilities. This will allow households, the private sector, financial authorities and governments to better understand and monitor the evolution of two key vulnerabilities in the financial system: the elevated level of household indebtedness and high house prices.

  Content Type(s): Publications, Financial System Hub articles Topic(s): Credit and credit aggregates, Financial stability, Housing, Monetary and financial indicators, Recent economic and financial developments, Sectoral balance sheet JEL Code(s): D, D1, D14, D8, D84, E, E5, G, G2, G21, R, R2, R21
• November 22, 2022

  Monitoring the health of Canada’s financial system

  Speech summary Carolyn Rogers Young Canadians in Finance Ottawa, Ontario

  Senior Deputy Governor Carolyn Rogers discusses risks and vulnerabilities in our financial system and what the Bank of Canada is doing to support financial stability.

  Content Type(s): Press, Speeches and appearances, Speech summaries Topic(s): Financial stability, Housing, Inflation and prices, Recent economic and financial developments
• November 22, 2022

  Financial stability in times of uncertainty

  Remarks Carolyn Rogers Young Canadians in Finance Ottawa, Ontario

  Senior Deputy Governor Carolyn Rogers discusses the Bank’s work to monitor risks and vulnerabilities in Canada’s financial system and support greater financial stability.

  Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Financial stability, Housing, Inflation and prices, Recent economic and financial developments

• Variable-rate mortgages with fixed payments: Examining trigger rates

  Staff Analytical Note 2022-19 Stephen Murchison, Maria teNyenhuis

  We estimate the share of variable-rate mortgages with fixed payments that reached the so-called trigger rate—the interest rate at which mortgage payments no longer cover the principal. Amid rising interest rates, this share was close to 50% at the end of October 2022 and could potentially reach 65% in 2023.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Credit and credit aggregates, Financial institutions, Interest rates, Recent economic and financial developments JEL Code(s): D, D1, E, E4, E5, G, G2, G21
• November 21, 2022

  CARR Meeting (November 21, 2022)

  Content Type(s): Meetings Source(s): Canadian Alternative Reference Rate Working Group

• Are Working Hours Complements in Production?

  Staff Working Paper 2022-47 Lin Shao, Faisal Sohail, Emircan Yurdagul

  Using Canadian matched employer-employee data, we show that working hours of different workers are gross complements in production rather than perfect substitutes, as is typically assumed by macroeconomic models of production.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Labour markets JEL Code(s): E, E2, E23, J, J2, J22, J23, J3, J31
• November 18, 2022

  The Government of Canada announces the issuance of a Ukraine Sovereignty Bond

  To offer Canadians an opportunity to directly support Ukraine, the Government of Canada announced that it will issue a Ukraine Sovereignty Bond. The five-year, $500 million bond, denominated in Canadian dollars, will be issued in late November 2022.

  Content Type(s): Press, Market notices

• Canada’s Beveridge curve and the outlook for the labour market

  Staff Analytical Note 2022-18 Alexander Lam

  Canada’s labour market is tight but beginning to ease. Unemployment will likely rise in turn, but the economy can avoid a recessionary surge given current conditions. Higher unemployment would nonetheless be material, especially for those directly impacted.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Business fluctuations and cycles, Central bank research, Labour markets, Recent economic and financial developments JEL Code(s): E, E3, E32, J, J2, J20, J6, J63, J64