Financial stability, Financial system regulation and policies
-
-
Stablecoins and Their Risks to Financial Stability
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. -
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. -
November 22, 2022
Monitoring the health of Canada’s financial system
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. -
November 22, 2022
Financial stability in times of uncertainty
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. -
Considerations for the allocation of non-default losses by financial market infrastructures
Non-default losses of financial market infrastructures (FMIs) have gained attention due to their potential impacts on FMIs and FMI participants, and the lack of a common approach to address them. A key question is, who should absorb these losses?