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September 18, 2013
Returning to Natural Economic Growth
Bank of Canada Governor Stephen S. Poloz discusses the preconditions for a return to natural economic growth for Canada. -
January 30, 2003
Annual Report 2002
In the year just ended, the global economy faced a number of exceptional challenges, reflecting a wide range of economic, financial, and geopolitical risks and uncertainties. These included the fallout from the September 2001 terrorist attacks, corporate accounting scandals, stock market volatility, and developments in the Middle East. Despite this global backdrop, the Canadian economy outperformed virtually all other industrial economies, growing by about 3 1/4 per cent and creating 560,000 jobs, while inflation expectations remained well anchored to the Bank of Canada’s 2 per cent inflation-control target. -
March 16, 2004
Adjusting to Global Economic Change
There is a great physical distance between our two countries - in terms of latitude, there are about 80 degrees of separation between Buenos Aires and Ottawa. But despite that distance, Canada and Argentina are closer, and have more in common, than you might think. We are both federations, with a certain natural tension between the national government and relatively powerful provinces. -
The New Basel Capital Accord and the Cyclical Behaviour of Bank Capital
The authors conduct a counterfactual simulation of the proposed rules under the new Basel Capital Accord (Basel II), including the revised treatment of expected and unexpected credit losses proposed by the Basel Committee in October 2003. -
Vulnerabilities in Defined-Benefit Pension Plans
An effective pension system enhances economic and financial efficiency. A majority of pension plans in Canada are defined-benefit (DB) plans, but DB plans are under stress from increasing longevity, low long-term interest rates, and the shrinking equity premium. DB plans are vulnerable to such shocks because they are complex financial vehicles, with interdependencies not fully […] -
Housing Affordability and Parental Income Support
In many countries, the cost of housing has greatly outpaced income growth, leading to a housing affordability crisis. Leveraging Canadian loan-level data and quasi-experimental variation in payment-to-income constraints, we document an increasing reliance of first-time homebuyers on financial help from their parents, through mortgage co-signing. We show that parental support can effectively relax borrowing constraints—potentially to riskier borrowers. -
November 21, 2002
Is Canada Dollarized?
The sharp depreciation of the Canadian dollar and the successful launch of the euro have sparked a lively debate in Canada about the possible benefits of formally adopting the U.S. dollar as our national currency. Some observers have suggested that this debate is largely irrelevant, since Canada is already highly "dollarized." Canadian businesses and households, they assert, often use the U.S. dollar to perform standard money functions in preference to their own currency. Very little evidence has been provided, however, to support these claims. The authors review the available data with a view to drawing some tentative conclusions about the extent to which Canada has already been informally dollarized. The evidence suggests that many of the concerns that have been expressed about the imminent demise of the Canadian dollar have been misplaced. The Canadian dollar continues to be used as the principal unit of account, medium of exchange, and store of value within our borders. Moreover, there is no indication that dollarization is likely to take hold in the foreseeable future. Indeed, in many respects, the Canadian economy is less dollarized now than it was 20 years ago. -
November 17, 2016
Bank of Canada Review - Autumn 2016
What is the role of central banks in financial stability? How has this role changed in recent years? Bank researchers share their insights on this matter and provide an overview of recent changes the Bank has made to its Emergency Lending Assistance Policy. Researchers also provide a history of four major commodity supercycles, dating back to the early 1900s. Finally, there is discussion about structural reforms in emerging-market economies, such as China, and how these reforms influence potential growth. -
Bank Market Power and Central Bank Digital Currency: Theory and Quantitative Assessment
We show that issuing a deposit-like central bank digital currency (CBDC) with a proper interest rate would encourage banks to pay higher interest to keep their customers. Banks would then attract more deposits and offer more loans. Hence, a CBDC would not necessarily crowd out private banking.