Eric Santor was appointed as an Advisor to the Governor in 2019. In this role, he is co-Secretary to the Governing Council and the Managing Director of the International Economic Analysis Department. He also works on policy issues related to digitalization, Artificial Intelligence and productivity. Mr. Santor’s research has also focused on issues relating to the incidence and effects of unconventional monetary policy, and the international monetary system and global financial architecture.
Mr. Santor joined the Bank in 2001 as an economist in the former Monetary and Financial Analysis Department. He moved to the International Economic Analysis Department in 2003, where he assumed increasing responsibilities until becoming Managing Director in 2013. Before his appointment as Advisor to the Governor on Digitalization, Mr. Santor served as Managing Director of the Bank’s Canadian Economic Analysis Department.
Mr. Santor was born in London, Ontario. He completed his BA in History and Political Science at Huron College, University of Western Ontario, and his PhD in Economics at the University of Toronto.
This paper summarizes the international evidence on the performance of quantitative easing (QE) as a monetary policy tool when conventional policy rates are constrained by the effective lower bound (ELB). A large body of evidence suggests that expanding the central bank’s balance sheet through large-scale asset purchases can provide effective stimulus under the ELB.
The Latin American debt crises in the 1980s and the Asian crisis in the late 1990s both provided impetus for reforming the framework for restructuring sovereign debt. In the late 1980s, the Brady plan established the importance of substantive debt relief in addressing some crises.
The authors examine the institutional and governance framework of modern central banks to determine whether there are lessons that can be applied to the International Monetary Fund's (IMF's) institutional framework. Such a comparison is appealing for two reasons. First, both central banks and the IMF carry out tasks that can be described as "delegated responsibilities." […]
Prices of commodities, including metals, energy and agricultural products, rose markedly over the 2009–2010 period. Some observers have attributed a significant part of this increase in commodity prices to the U.S. Federal Reserve’s large-scale asset purchase (LSAP) programs.
The ongoing review of the IMF, initiated in 2005 by Managing Director De Rato, presents an excellent opportunity to re-examine the role, functions and governance of the Fund.
The governance challenges facing the International Monetary Fund (IMF) are not simply limited to representation and voice, and the associated question of quota allocation.
The authors examine the investment behaviour of a sample of small, credit-constrained firms in Sri Lanka. Using a unique panel-data set, they analyze and compare the activities of two groups of small firms distinguished by their different access to financing; one group consists of firms with heavily subsidized loans from the World Bank, and the other consists of firms without such subsidies.
Microfinance institutions now serve over 10 million poor households in the developing and developed world, and much of their success has been attributed to their innovative use of peer group lending. There is very little empirical evidence, however, to suggest that group lending schemes offer a superior institutional design over lending programs that serve individual borrowers.
Recent events, such as the East Asian, Mexican, Scandinavian, and Argentinian crises, have sparked considerable interest in exploring how shocks experienced by one country can spread vis-à-vis real and nominal links to other countries' banking systems. Given the large costs associated with banking-system failures, both economists and policy-makers are interested in predicting the onset of banking crises and assessing the likelihood of contagion during crisis events.
Central banks can implement unconventional monetary policy measures to provide additional easing when policy interest rates come close to their lower limit. To date, the international experience with tools such as quantitative easing and negative interest rates has been largely positive. Central banks may also use several such measures simultaneously, with often mutually reinforcing effects. Yet, unconventional tools are also subject to potential limits, and the costs associated with these measures could rise with extensive and prolonged use.
Following the recent financial crisis, major central banks have introduced several types of unconventional monetary policy measures, including liquidity and credit facilities, asset purchases and forward guidance. To date, these measures appear to have been successful. They restored market functioning, facilitated the transmission of monetary policy and supported economic activity. They have potential costs, however, including challenges related to the greatly expanded balance sheets of central banks and the eventual exit from these measures, as well as the vulnerabilities that can arise from prolonged monetary accommodation.
The current international monetary system is in need of reform. This article first provides an assessment of the existing system, highlighting both its strengths and weaknesses. It notes that the system has not facilitated the symmetric and timely adjustment in the real exchange rate necessary to accommodate the integration of China and other emerging-market economies into the global economy. This lack of adjustment contributed to the global financial crisis and recession and, because it is forestalling the required rotation of global demand, is hindering the global recovery. The article then discusses reform of the system that would see all systemically important countries and currency areas adopt market-based and convertible floating exchange rates supported by appropriate monetary, fiscal and financial sector policy frameworks. It also examines the roles of the G-20 countries and major international financial institutions in promoting and facilitating the system’s transition.
As part of their policy response to the financial crisis of 2007–09, central banks introduced numerous unprecedented monetary policy measures to provide monetary easing. This article defines and documents these measures, focusing on central bank asset purchases and their impact on central bank balance sheets. It then discusses the challenges of identifying the effects of these measures and explores possible exit strategies. The potential costs of these policies are also analyzed, as well as the broader implications for monetary policy frameworks.
This article explores the role of inflation expectations in the conduct of monetary policy. It reviews the various measures of inflation expectations used by central banks, including surveys and market-based indicators, and considers their advantages and disadvantages. It examines the critical role of inflation expectations in the framework that central banks use to understand, forecast, and control inflation. It also looks at their role as an indicator of central bank credibility. The behaviour of inflation expectations over the past two years is analyzed and policy conclusions are offered.
Given the rapid and ongoing integration of the global economy, the International Monetary Fund needs to renew its role, governance structure, and functions if it is to maintain its relevance as the institution charged with promoting global financial stability. Lecavalier and Santor examine the areas of possible reform, including quota, voice, and representation; internal governance; surveillance; lending instruments; finances; and the Fund's role in low-income countries. They also review current Bank of Canada research that supports these reform efforts, including an integrated framework for IMF surveillance recently developed at the Bank.
Technology can enhance efficiency and help create new jobs, but challenges like automation's impact on employment also need careful consideration and proactive solutions.
"Does the Microfinance Lending Model Actually Work?" (with Rafael Gomez), Whitehead Journal of Diplomacy and International Relation, Volume IX, No. 2 Summer/Fall 2008.
"Foreign Asset Risk Exposure, DOI, and Performance: An Analysis of Canadian Banks" (with Walid Hejazi), Journal of International Business Studies, forthcoming.
"Migration, Social Networks and Credit: Empirical Evidence from Peru" (with Sonia Laszlo), The Developing Economies, forthcoming.
"Renewing IMF Surveillance: Transparency, Accountability and Independance" (with Robert Lavigne and Philipp Maier), Review of International Organizations, March 2009, 4: 1.
"Family Values: Ownership Structure, Performance and Capital Structure of Canadian Firms", (with Michael R. King), Journal of Banking and Finance, 2008, 32: 11, p. 2423-2432.
"Financial Constraints and Investment: Assessing the Impact of a World Bank Loan Program on Small and Medium-Sized Enterprises in Sri Lanka" (with Varouj Aivazian), Canadian Journal of Economics, 2008, 41: 2, p. 475-500.
"Membership has its privileges: the effect of social capital and neighborhood characteristics on the earnings of microfinance borrowers," (with Rafael Gomez), Canadian Journal of Economics, 2001, 34: 4, 943-966
Other
Publications
"Central Bank Balance Sheets and Long Term Forward Rates," (with Eric Santor and Lena Suchanek) In Interest Rates, Prices and Liquidity: Lessons from the Financial Crisis, edited by Jagjits S. Chadha and Sean Holly.New York: Cambridge University Press, p.172-194.
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