Posts
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Financial Frictions, Durable Goods and Monetary Policy
Financial frictions affect how much consumers spend on durable and non-durable goods. Borrowers can face both loan-to-value (LTV) constraints and payment-to-income (PTI) constraints. -
Resolving Failed Banks: Uncertainty, Multiple Bidding & Auction Design
Bank resolution is costly. In the United States, the Federal Deposit Insurance Corporation (FDIC) typically resolves failing banks by auction. -
August 21, 2019
Expansion of Term Repo Operations for balance sheet management purposes
As part of the regular management of the Bank of Canada’s (Bank) balance sheet, the Bank acquires assets to offset its liabilities, which consists mainly of bank notes in circulation and government deposits.
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August 20, 2019
Government of Canada Real Return Bond Consultations
A consultation document on issues pertaining to the design and operation of the Real Return Bond program, prepared jointly by the Department of Finance (DoF) and the Bank of Canada (BoC), is being published today. -
Bridging Canadian Business Lending and Market-Based Risk Measures
Lending to business is central to economic growth because it supports investment by firms. Knowing how market participants view risk in the financial system can give the Bank of Canada information about future growth in business loans. In this note, we look at three market-based risk measures and find that sudden increases in the perception of risk in the Canadian banking system are associated with a weaker outlook for business loans and real gross domestic product. -
Flight from Safety: How a Change to the Deposit Insurance Limit Affects Households’ Portfolio Allocation
Deposit insurance protects depositors from failing banks, thus making insured deposits risk-free. When a deposit insurance limit is increased, some deposits that previously were uninsured become insured, thereby increasing the share of risk-free assets in households’ portfolios. This increase cannot simply be undone by households, because to invest in uninsured deposits, a household must first invest in insured deposits up to the limit. This basic insight is the starting point of the analysis in this paper. -
August 14, 2019
Bank of Canada Announces Joint Recipients of its 2019 Law Enforcement Award of Excellence for Counterfeit Deterrence
The Bank of Canada is pleased to announce the recipients of its 2019 Law Enforcement Award of Excellence for Counterfeit Deterrence. -
August 13, 2019
2019 Summer Workshop on Money, Banking, Payments and Finance
The Bank of Canada, together with Ed Nosal (Federal Reserve Bank at Atlanta) and Randall Wright (University of Wisconsin-Madison), showcased research on the interbank market, monetary policy, cryptocurrency and central bank digital currency. -
Exploring Wage Phillips Curves in Advanced Economies
We investigate the extent to which excess supply (demand) in labour markets contributes to a lower (higher) growth rate of average nominal wages for workers. Using panel methods on data from 10 advanced economies for 1992–2018, we produce reduced-form estimates of a wage Phillips curve specification that is consistent with a New Keynesian framework.