July 22, 2024
Posts
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Credit Card Minimum Payment Restrictions
We study a government policy that restricts repayment choices with the aim of reducing credit card debt and estimate its effects by applying a difference-in-differences methodology to comprehensive credit-reporting data about Canadian consumers. We find the policy has trade-offs: reducing revolving debt comes at a cost of reducing credit access, and potentially increasing delinquency. -
The reliance of Canadians on credit card debt as a predictor of financial stress
I analyze the relationship between carrying a credit card balance and future financial stress. I find that carrying a balance significantly increases the likelihood that credit card holders miss future debt payments. This likelihood tends to rise as credit card balances grow and are held for long periods. -
Could all-to-all trading improve liquidity in the Government of Canada bond market?
We find that on any given day, nearly half of Government of Canada bond transactions by clients of dealers can be offset with other clients, including during the turmoil in March 2020. Our results show that under certain conditions clients could potentially trade directly with each other and are a step towards understanding the relevance of broader all-to-all trading in the Government of Canada bond market. -
July 15, 2024
Business Outlook Survey—Second Quarter of 2024
Results from the Business Outlook Survey and the Business Leaders’ Pulse continue to signal weak demand, which is weighing on investment and hiring plans. While few firms are planning layoffs, labour markets are widely seen as continuing to soften. Although they remain above average, wage and inflation expectations are easing. Most firms that made abnormally large price increases in the past 12 months do not plan to do so again in the coming year. -
July 15, 2024
Canadian Survey of Consumer Expectations—Second Quarter of 2024
Consumers’ perceptions of inflation are unchanged from a quarter ago, but their expectations for near-term inflation declined significantly. While both measures have improved substantially in recent quarters, they remain higher than they were before the COVID‑19 pandemic. Most consumers continue to think that domestic factors are contributing to high inflation. Sentiment remains subdued and unchanged from last quarter, as high inflation and elevated interest rates continue to constrain people’s budgets. Perceived financial stress remains high, most consumers continue to report spending cuts, and pessimism about future economic conditions persists. Canadians’ perceptions of the labour market have weakened this quarter, especially among private sector employees. Yet overall wage growth expectations reached a new survey high, driven by public sector employees. -
July 15, 2024
The Bank of Canada releases the second quarter issues of the Business Outlook Survey and the Canadian Survey of Consumer Expectations
On Monday, July 15, 2024, the Bank of Canada will release the second quarter issues of the Business Outlook Survey and the Canadian Survey of Consumer Expectations. -
July 12, 2024
Bank of Canada announces increases to the dealer and round limits for Overnight Repo operations
Effective Monday, July 15, 2024, dealer limits for Overnight Repo (OR) operations will increase to $3 billion for each eligible participant from the previous $1 billion. -
The Ecology of Automated Market Makers
This paper describes the ecology of automated market makers, which are the most popular decentralized exchange model for the pricing and trading of crypto assets within decentralized finance. -
The Role of Public Money in the Digital Age
A well-functioning monetary system is characterized by public and private forms of money that exchange at par as value flows freely between them. A relevant retail public money—whether in the form of cash, a central bank digital currency or both—is a necessary component of such a monetary system.