Publications
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December 21, 2008
Financial System Review - December 2008
The turmoil in global financial markets entered a new phase in September, moving to a more acute and broad-based loss of confidence in the context of a series of failures and near-failures of large financial institutions in the United States and Europe. -
December 9, 2008
Senior Loan Officer Survey - Fourth-Quarter 2008
Survey respondents reported a further widespread tightening in lending conditions. Respondents attributed the tightening of lending conditions mainly to concerns about the general economic outlook, although a worsening of industry-specific factors was also cited as a contributing cause. -
December 6, 2008
Beads to Bytes: Canada's National Currency Collection
This volume explores money and the role it has played, and continues to play, in society, through the lens of Canada's National Currency Collection. The Collection is an extraordinary repository of coins, bank notes, and related paraphernalia from around the world. Soft cover, 124 pages (2008).
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November 11, 2008
The Role of Dealers in Providing Interday Liquidity in the Canadian-Dollar Market
Access to information about the future direction of the exchange rate can be extremely valuable in the foreign exchange market. Evidence presented in this article suggests that Canadian dealers are more likely to provide interday liquidity to foreign, rather than Canadian, financial customers, since foreign financial flows can be more informative about future movements in the exchange rate. The author reveals a statistical relationship between the supply of liquidity provided by non-financial firms and that provided by dealing institutions across time, and across markets, and suggests that the relationship between the positions of commercial clients and market-makers, and the role played by dealers in interday liquidity provision, has been understated in the market microstructure literature. -
November 11, 2008
Merchants' Costs of Accepting Means of Payment: Is Cash the Least Costly?
In a competitive sales environment, merchants are compelled to offer consumers the option of paying for goods and services using a variety of payment methods, including cash, debit card, or credit card. Each method entails different costs and benefits to merchants. To better understand the costs of accepting retail payments, the Bank of Canada surveyed over 500 Canadian merchants and found that most consider cash the least costly. This article investigated this perception by calculating the variable costs per transaction of accepting different means of payment. The findings are that costs for each payment method vary by merchant and transaction value, with debit cards the least costly payment for a broad cross-section of merchants. -
November 11, 2008
The Market Impact of Forward-Looking Policy Statements: Transparency vs. Predictability
Central banks continuously strive to improve how they communicate to financial markets and the public in order to increase transparency. For this reason, many central banks have begun to include guidance on the policy rate in the form of forward-looking statements in their communications. This article examines the debate over the usefulness of providing such statements from both theoretical and empirical standpoints. The evidence presented here suggests that the use of forward-looking statements in Bank of Canada communications has made the Bank more predictable, but not necessarily more transparent. -
November 11, 2008
Conference Summary: International Experience with the Conduct of Monetary Policy under Inflation Targeting
Central bankers from inflation-targeting and non-inflation-targeting countries around the world and several distinguished scholars assembled at the Bank of Canada in July 2008 to review the international experience in some detail. This article highlights topics covered in the special lectures and sessions, including how inflation targeting can manage external shocks, various ways in which monetary policy decisions are taken, and the issues of transparency and communications. It also reports on the discussion in the closing panel, which considered options for the future of inflation targeting.