Staff research, Publications
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What has been putting upward pressure on CORRA?
From the autumn of 2023 into early 2024, the Canadian Overnight Repo Rate Average (CORRA), a measure of the cost of overnight general collateral Canadian dollar repos, was consistently well above the Bank’s target for the overnight rate. We find that, among several factors, long bond positions that require repo financing are the main driver of the recent upward pressure on CORRA. -
March 20, 2024
Summary of Governing Council deliberations: Fixed announcement date of March 6, 2024
This is an account of the deliberations of the Bank of Canada’s Governing Council leading to the monetary policy decision on March 6, 2024. -
Decomposing Large Banks’ Systemic Trading Losses
Do banks realize simultaneous trading losses because they invest in the same assets, or because different assets are subject to the same macro shocks? This paper decomposes the comovements of bank trading losses into two orthogonal channels: portfolio overlap and common shocks. -
How changes in the share of constrained households affect the effectiveness of monetary policy
We measure how the change in the share of constrained households in Canada following the COVID-19 recession has impacted the effectiveness of monetary policy. -
How Do Agents Form Macroeconomic Expectations? Evidence from Inflation Uncertainty
The uncertainty regarding inflation that is observed in density forecasts of households and professionals helps macroeconomists understand the formation mechanism of inflation expectations. Shocks to inflation take time to be perceived by all agents in the economy, and such rigidity is lower in a high-inflation environment. -
Central Bank Digital Currency and Banking Choices
To what extent does a central bank digital currency (CBDC) compete with bank deposits? To answer this question, we develop and estimate a structural model where each household chooses which financial institution to deposit their digital money with. -
February 7, 2024
Summary of Governing Council deliberations: Fixed announcement date of January 24, 2024
This is an account of the deliberations of the Bank of Canada’s Governing Council leading to the monetary policy decision on January 24, 2024. -
The Role of International Financial Integration in Monetary Policy Transmission
We propose an open-economy New Keynesian model with financial integration that allows financial intermediaries to hold foreign long-term bonds. We study the implications of financial integration on monetary policy transmission. Among various aspects of financial integration, the bond duration plays a major role. These results hold for conventional and unconventional monetary policies. -
February 5, 2024
Market Participants Survey—Fourth Quarter of 2023
The Market Participants Survey results are based on questionnaire responses from about 30 financial market participants.