Staff research, Publications
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June 9, 2022
Financial System Review—2022
The Canadian financial system remains resilient, but vulnerabilities have become more complex and risks have grown. The Bank is carefully watching households’ high levels of mortgage debt, as well as the risks associated with a price correction in Canada’s housing market. -
Settlement Balances Deconstructed
Because of the COVID-19 pandemic, public interest in the Bank’s balance sheet and, more specifically, the size of settlement balances, has grown. This paper deconstructs the concept of settlement balances and provides some context on their history, current state and possible future evolution. -
Foreign Exchange Interventions: The Long and the Short of It
This paper studies the effects of foreign exchange (FX) interventions in a two-region model where governments issue both short- and long-term bonds. We find that the term premium channel dominates the trade balance channel in our calibrated model. As a result, the conventional beggar-thy-neighbor effects of interventions are overturned. -
June 6, 2022
Financial System Survey highlights—Spring 2022
This article presents the key results from the spring 2022 Bank of Canada Financial System Survey, conducted between February 22 and March 18. The survey included a special section on the potential risks associated with the global normalization of monetary policy. -
May 31, 2022
Research Update - May 2022
This monthly newsletter features the latest research publications by Bank of Canada economists including external publications and working papers published on the Bank of Canada’s website. -
May 27, 2022
Quarterly Financial Report - First Quarter 2022
Quarterly Financial Report - First Quarter 2022 - For the period ended March 31, 2022 -
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. -
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. -
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.