Posts
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The Macroeconomic Effects of Portfolio Equity Inflows
I provide evidence that portfolio equity inflows can have expansionary effects on GDP and inflation if not offset by monetary policy. I use a shift-share instrument to estimate equity inflows based on plausibly exogenous timing of inflows into mutual funds with heterogeneous country portfolios. -
The Role of Bank Capital in the Propagation of Shocks
Recent events in financial markets have underlined the importance of analyzing the link between the financial health of banks and real economic activity. This paper contributes to this analysis by constructing a dynamic general equilibrium model in which the balance sheet of banks affects the propagation of shocks. -
November 13, 2014
Money in a Digital World
Senior Deputy Governor Carolyn Wilkins discusses the benefits and risks of e-money - including cryptocurrencies - and the Bank of Canada’s role. -
November 15, 2012
Access, Competition and Risk in Centrally Cleared Markets
Central counterparties can make over-the-counter markets more resilient and reduce systemic risk by mitigating and managing counterparty credit risk. These benefits are maximized when access to central counterparties is available to a wide range of market participants. In an over-the-counter market, there is an important trade-off between risk and competition. A model of an over-the-counter market shows how risk and competition could be influenced by the incentives of market participants as they move to central clearing. In a centrally cleared market, there may be less risk when participation is high. This helps to explain why regulators have put in place requirements for fair, open and risk-based access criteria.
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Mandatory Retention Rules and Bank Risk
This paper studies, theoretically and empirically, the unintended consequences of mandatory retention rules in securitization. It proposes a novel model showing that while retention strengthens monitoring, it may also encourage banks to shift risk. -
Clearing and Settlement Systems from Around the World: A Qualitative Analysis
As Canada continues to engage in a dialogue to develop the approach to modernizing its core payment systems, we analyze the core payment systems that exist in countries around the world. We study payment systems in 27 jurisdictions, encompassing a broad range of geographic regions, through three levels of analysis. -
Should Central Banks Adjust Their Target Horizons in Response to House-Price Bubbles?
The authors investigate the implications of house-price bubbles for the optimal inflation-target horizon using a dynamic general-equilibrium model with credit frictions, house-price bubbles, and small open-economy features. They find that, given the distribution of shocks and inflation persistence over the past 25 years, the optimal target horizon for Canada tends to be at the lower […] -
April 14, 2007
Bank of Canada Review - Spring 2007
Cover page
Gas Cards
All gas cards pictured here are part of the National Currency Collection of the Bank of Canada.
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June 10, 2021
The digital transformation and Canada’s economic resilience
Deputy Governor Tim Lane talks about the Bank’s latest interest rate announcement and discusses how the digital transformation has supported resilience through the pandemic and may be adding to the economy’s growth potential.