Uncategorized

• Consumer Credit with Over-optimistic Borrowers

  Staff Working Paper 2020-57 Florian Exler, Igor Livshits, James (Jim) C. MacGee, Michèle Tertilt

  When lenders cannot directly identify behavioural and rational borrowers, they use type scoring to track the likelihood of a borrower’s type. This leads to the partial pooling of borrowers, which results in rational borrowers subsidizing borrowing costs for behavioural borrowers. This, in turn, reduces the effectiveness of regulatory policies that target mistakes by behavioural borrowers.

  Content Type(s): Staff research, Staff working papers Topic(s): Credit and credit aggregates, Credit risk management, Financial system regulation and policies JEL Code(s): E, E2, E21, E4, E49, G, G1, G18, K, K3, K35

• Losing Contact: The Impact of Contactless Payments on Cash Usage

  Staff Working Paper 2020-56 Marie-Hélène Felt

  Contactless payment cards are a competitive alternative to cash. Using Canadian panel data from 2010 to 2017, this study investigates whether contactless credit cards are an important contributor to the decline in the transactional use of cash. 

  Content Type(s): Staff research, Staff working papers Topic(s): Bank notes, Digital currencies and fintech, Econometric and statistical methods, Financial services JEL Code(s): C, C3, C33, D, D1, D12, E, E4, E41

• Implementation and Effectiveness of Extended Monetary Policy Tools: Lessons from the Literature

  Staff Discussion Paper 2020-16 Grahame Johnson, Sharon Kozicki, Romanos Priftis, Lena Suchanek, Jonathan Witmer, Jing Yang

  This paper summarizes the literature on the performance of various extended monetary policy tools when conventional policy rates are constrained by the effective lower bound. We highlight issues that may arise when these tools are used by central banks of small open economies.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Monetary policy, Monetary policy implementation, Monetary policy transmission JEL Code(s): E, E5, E52, E58, E6, E63

• A Reference Guide for the Business Outlook Survey

  Staff Discussion Paper 2020-15 David Amirault, Naveen Rai, Laurent Martin

  The Business Outlook Survey (BOS) has become an important part of monetary policy deliberations at the Bank of Canada and is also well known in Canadian policy and financial circles. This paper compiles more than 20 years of experience conducting the BOS and serves as a comprehensive reference manual.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Firm dynamics, Regional economic developments JEL Code(s): C, C8, C83, D, D2, D22, E, E3, E32
• December 18, 2020

  Operational details for upcoming secondary market purchases of Government of Canada securities (January 4-15)

  As previously announced, the Bank of Canada (the Bank) launched on April 1, 2020 a program to purchase Government of Canada securities in the secondary market – the Government Bond Purchase Program (GBPP). The GBPP operations for the two-week period beginning January 4, 2021 are announced below.

  Content Type(s): Press, Market notices Source(s): Government of Canada Bond Purchase Program

• Strategic Uncertainty in Financial Markets: Evidence from a Consensus Pricing Service

  Staff Working Paper 2020-55 Lerby Ergun, Andreas Uthemann

  We look at the informational content of consensus pricing in opaque over-the-counter markets. We show that the availability of price data informs participants mainly about other participants’ valuations, rather than about the value of a financial security.

  Content Type(s): Staff research, Staff working papers Topic(s): Financial institutions, Financial markets, Market structure and pricing JEL Code(s): C, C5, C58, D, D5, D53, D8, D83, G, G1, G12, G14
• December 18, 2020

  Return to Standard Terms for Government of Canada Bond Auctions

  The Bank of Canada today announced a plan for a phased return to standard terms for auctions of Government of Canada nominal bonds and real return bonds by June 2021.

  Content Type(s): Press, Market notices

• Labor Market Policies During an Epidemic

  Staff Working Paper 2020-54 Serdar Birinci, Fatih Karahan, Yusuf Mercan, Kurt See

  We study the labour market and welfare effects of expanding unemployment insurance benefits and introducing payroll subsidies during the COVID-19 pandemic. We find that both policies are complementary and are beneficial to different types of workers. Payroll subsidies preserve the employment of workers in highly productive jobs, while unemployment insurance replaces lost income for workers who experience inevitable job loss.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Coronavirus disease (COVID-19), Fiscal policy, Labour markets JEL Code(s): E, E2, E24, E6, E62, J, J6, J64
• December 15, 2020

  Strengthening our exports

  Speech summary Tiff Macklem Greater Vancouver Board of Trade Vancouver, British Columbia

  Governor Tiff Macklem talks about the importance of trade and exports to Canada’s economic recovery. He also talks about steps policy-makers and business can take to attract investment and improve competitiveness.

  Content Type(s): Press, Speeches and appearances, Speech summaries Topic(s): Coronavirus disease (COVID-19), Monetary policy, Productivity, Service sector, Trade integration
• December 15, 2020

  Trading for a sustainable recovery

  Remarks (delivered virtually) Tiff Macklem Greater Vancouver Board of Trade Vancouver, British Columbia

  Governor Tiff Macklem talks about how important trade is for the economic recovery. He discusses what policymakers and business leaders can do to encourage growth in trade.

  Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Coronavirus disease (COVID-19), Monetary policy, Productivity, Service sector, Trade integration