Toni Gravelle

Deputy Governor

Executive

Bio

Toni Gravelle was appointed Deputy Governor of the Bank of Canada, effective October 1, 2019. In this role, he oversees the Financial Markets Department (FMD) and the Banking and Payments Department, and is one of two Deputy Governors who oversee the Bank’s role in maintaining a stable and efficient financial system. As a member of the Bank’s Governing Council, he also shares responsibility for decisions about monetary policy and for setting the strategic direction of the Bank.

Mr. Gravelle first joined the Bank in 1996 as an analyst in FMD and went on to hold increasingly senior positions. He became Deputy Managing Director of the Financial Stability Department in 2008 and held that position until 2013, when he was seconded to the Department of Finance Canada. He returned to the Bank in 2015 when he was appointed Managing Director of FMD.

Along with his expertise in Canada’s financial sector, Mr. Gravelle brings international experience to the Bank. From 2002 to 2005, he was an economist at the International Monetary Fund (IMF), where he helped assess the stability of financial systems in France and Senegal and contributed to the IMF’s semi-annual Global Financial Stability Report.

Mr. Gravelle is a native of Corbeil, Ontario, and holds a PhD in economics from Western University.

Speeches

March 21, 2024

Going back to normal: The Bank of Canada’s balance sheet after quantitative tightening

Remarks Toni Gravelle CFA Society Toronto Toronto, Ontario
Deputy Governor Toni Gravelle provides an update on quantitative tightening and talks about how the Bank of Canada will manage its balance sheet once normalization ends.
Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Coronavirus disease (COVID-19), Financial institutions, Financial markets, Financial system regulation and policies, Lender of last resort, Monetary policy implementation, Payment clearing and settlement systems, Recent economic and financial developments
December 7, 2023

Economic progress report: Immigration, housing and the outlook for inflation

Remarks Toni Gravelle Windsor–Essex Regional Chamber of Commerce Windsor, Ontario
Deputy Governor Toni Gravelle discusses the latest interest rate decision along with how immigration helps Canada’s economy and how it impacts inflation.
Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Domestic demand and components, Housing, Inflation and prices, Interest rates, Labour markets, Monetary policy, Potential output, Price stability, Recent economic and financial developments
March 29, 2023

The Bank of Canada’s market liquidity programs: Lessons from a pandemic

Remarks Toni Gravelle National Bank Financial Services Conference Montréal, Quebec
Deputy Governor Toni Gravelle speaks about market liquidity measures taken during the COVID-19 pandemic, and addresses recent turmoil in the US and international banking sectors.
Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Coronavirus disease (COVID-19), Financial markets, Financial stability, Lender of last resort, Recent economic and financial developments
May 12, 2022

The perfect storm

Remarks Toni Gravelle Association des économistes québécois Montréal, Quebec
Deputy Governor Toni Gravelle discusses the commodity price shock and its implications for the Canadian economy and monetary policy.
Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Coronavirus disease (COVID-19), Domestic demand and components, Exchange rates, Expectations, Inflation and prices, Inflation: costs and benefits, Interest rates, International topics, Labour markets, Monetary policy, Monetary policy and uncertainty, Monetary policy communications, Recent economic and financial developments
December 9, 2021

Economic progress report: A recovery unlike any other

Remarks (delivered virtually) Toni Gravelle Surrey Board of Trade Surrey, British Columbia
Deputy Governor Toni Gravelle provides an economic update and discusses the relationship between supply bottlenecks and inflation.
Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Coronavirus disease (COVID-19), Domestic demand and components, Inflation and prices, Inflation targets, Interest rates, Monetary policy and uncertainty, Recent economic and financial developments, Service sector
March 23, 2021

Market stress relief: The role of the Bank of Canada’s balance sheet

Remarks (delivered virtually) Toni Gravelle CFA Society Toronto Toronto, Ontario
Deputy Governor Toni Gravelle discusses actions taken by the Bank of Canada to respond to market-wide stresses during the COVID-19 pandemic and the Bank’s role as lender of last resort in the financial system.
Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Coronavirus disease (COVID-19), Financial institutions, Financial markets, Financial system regulation and policies, Lender of last resort, Monetary policy
November 23, 2020

Financial stability and the COVID-19 pandemic

Remarks (delivered virtually) Toni Gravelle Autorité des marchés financiers Montréal, Quebec
Deputy Governor Toni Gravelle provides an assessment of risks to the stability of the Canadian financial system, including risks stemming from the COVID-19 pandemic.
Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Business fluctuations and cycles, Coronavirus disease (COVID-19), Financial institutions, Financial markets, Financial stability, Recent economic and financial developments
June 4, 2020

Economic progress report: keeping markets working

Remarks (delivered virtually) Toni Gravelle Greater Sudbury Chamber of Commerce Sudbury, Ontario
Deputy Governor Toni Gravelle discusses the Bank’s latest interest rate announcement and explains how efforts to keep financial markets functioning through the COVID-19 crisis will lay a solid foundation for economic recovery
Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Coronavirus disease (COVID-19), Financial markets, Financial stability, Monetary policy, Recent economic and financial developments

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Staff discussion papers

Reviewing Canada’s Monetary Policy Implementation System: Does the Evolving Environment Support Maintaining a Floor System?

Staff Discussion Paper 2023-10 Toni Gravelle, Ron Morrow, Jonathan Witmer
At the onset of the pandemic, the Bank of Canada transitioned its framework for monetary policy implementation from a corridor system to a floor system, which it has since decided to maintain. We provide a comprehensive analysis of both frameworks and assess their relative merits based on five key criteria that define a sound framework.
Content Type(s): Staff research, Staff discussion papers Topic(s): Market structure and pricing, Monetary policy implementation, Payment clearing and settlement systems JEL Code(s): D, D4, D47, E, E4, E42, E5, E58

What Matters in Determining Capital Surcharges for Systemically Important Financial Institutions?

Staff Discussion Paper 2011-9 Céline Gauthier, Toni Gravelle, Xuezhi Liu, Moez Souissi
One way of internalizing the externalities that each individual bank imposes on the rest of the financial system is to impose capital surcharges on them in line with their systemic importance.
Content Type(s): Staff research, Staff discussion papers Topic(s): Financial system regulation and policies JEL Code(s): C, C1, C15, C8, C81, E, E4, E44, G, G0, G01, G2, G21

Has the Inclusion of Forward-Looking Statements in Monetary Policy Communications Made the Bank of Canada More Transparent?

Staff Discussion Paper 2010-15 Christine Fay, Toni Gravelle
To investigate the extent to which the transparency of the Bank of Canada's monetary policy has improved, the authors examine empirically – over the period 30 October 2000 to 31 May 2007 – the reaction of Canadian financial markets to official Bank communications, and in particular their reaction to the recent inclusion of forward-looking policy-rate guidance in these communications.
Content Type(s): Staff research, Staff discussion papers Topic(s): Central bank research, Interest rates, Monetary policy communications, Monetary policy transmission JEL Code(s): E, E5, E52, E58

The Implementation of Monetary Policy in Canada

Staff Discussion Paper 2008-9 Walter Engert, Toni Gravelle, Donna Howard
The authors present a detailed discussion of the Bank of Canada's framework for the implementation of monetary policy. As background, they provide a brief overview of the financial system in Canada, including a discussion of the financial services industry and the money market.
Content Type(s): Staff research, Staff discussion papers Topic(s): Financial institutions, Financial markets, Monetary policy implementation, Payment clearing and settlement systems JEL Code(s): E, E5, E52, E58, G, G2, G21

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Staff working papers

Measuring Systemic Importance of Financial Institutions: An Extreme Value Theory Approach

Staff Working Paper 2011-19 Toni Gravelle, Fuchun Li
In this paper, we define a financial institution’s contribution to financial systemic risk as the increase in financial systemic risk conditional on the crash of the financial institution. The higher the contribution is, the more systemically important is the institution for the system.
Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, Financial institutions, Financial stability, Financial system regulation and policies JEL Code(s): C, C1, C14, C5, C58, G, G2, G21, G3, G32

Shift Contagion in Asset Markets

Staff Working Paper 2003-5 Toni Gravelle, Maral Kichian, James Morley
The authors develop a new methodology to investigate how crises cause the relationship between financial variables to change. Two possible sources of increased co-movement between markets during high-variance episodes are considered: larger common shocks operating through standard market linkages, and a structural change in the propagation of shocks between markets, called "shift contagion."
Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, Financial markets JEL Code(s): C, C3, C32, F, F4, F42, G, G1, G15

The Microstructure of Multiple-Dealer Equity and Government Securities Markets: How They Differ

Staff Working Paper 2002-9 Toni Gravelle
Although dealership government and equity securities have, on the surface, similar market structures, the author demonstrates that some subtle differences exist between them that are likely to significantly affect the way market-makers trade, and as such have an impact on the liquidity that they provide.
Content Type(s): Staff research, Staff working papers Topic(s): Debt management, Financial markets, Market structure and pricing JEL Code(s): G, G1, G10, G15, G18

Reactions of Canadian Interest Rates to Macroeconomic Announcements: Implications for Monetary Policy Transparency

Staff Working Paper 2001-5 Toni Gravelle, Richhild Moessner
In this study we statistically quantify the reactions of Canadian and U.S. interest rates to macroeconomic announcements released in Canada and in the United States. We find that Canadian interest rates react very little to Canadian macroeconomic news and are significantly affected by U.S. macroeconomic news, which indicates that international influences on the Canadian fixed-income markets are important.
Content Type(s): Staff research, Staff working papers Topic(s): Financial markets, Interest rates, Monetary policy implementation JEL Code(s): E, E0, E4, E5

Liquidity of the Government of Canada Securities Market: Stylized Facts and Some Market Microstructure Comparisons to the United States Treasury Market

Staff Working Paper 1999-11 Toni Gravelle
The aims of this study are to examine how liquidity in the Government of Canada securities market has evolved over the 1990s and to determine what factors influence the level of liquidity in this market, with some comparisons to the U.S. Treasury securities market. We find empirical support for the hypothesis that an increase in […]
Content Type(s): Staff research, Staff working papers Topic(s): Financial markets JEL Code(s): D, D4, G, G1, G2

Buying Back Government Bonds: Mechanics and Other Considerations

Staff Working Paper 1998-9 Toni Gravelle
With the elimination of the federal deficit, the Bank of Canada, the Department of Finance, and financial market participants are examining ways to manage the reduction in the stock of marketable debt. This paper summarizes three different methods—reverse auction, over-the-counter purchases, and conversions—that could be used to buy back Government of Canada bonds before they […]
Content Type(s): Staff research, Staff working papers Topic(s): Debt management, Financial markets JEL Code(s): G, G1

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Bank publications

Bank of Canada Review articles

November 11, 2008

The Market Impact of Forward-Looking Policy Statements: Transparency vs. Predictability

Bank of Canada Review - Winter 2008-2009 Christine Fay, Toni Gravelle
Central banks continuously strive to improve how they communicate to financial markets and the public in order to increase transparency. For this reason, many central banks have begun to include guidance on the policy rate in the form of forward-looking statements in their communications. This article examines the debate over the usefulness of providing such statements from both theoretical and empirical standpoints. The evidence presented here suggests that the use of forward-looking statements in Bank of Canada communications has made the Bank more predictable, but not necessarily more transparent.
Content Type(s): Publications, Bank of Canada Review articles Topic(s): Central bank research, Interest rates, Monetary policy transmission
October 12, 2007

Bank of Canada Workshop on Derivatives Markets in Canada and Beyond

Bank of Canada Review - Autumn 2007 Toni Gravelle
At this 2006 workshop hosted by the Bank of Canada, an international group of market participants, regulators, and policy-makers gathered to assess recent developments in the derivatives market. Among the topics discussed were the recent prodigious growth in risk-transfer instruments, including credit derivatives and inflation-linked derivatives, as well as the accompanying challenges and benefits. Overall, the development of derivatives markets was seen as providing broad economic benefits, including more complete financial markets, improved market liquidity, and increased capacity of the financial system to effectively price and bear risk. Yet concern was also voiced that market participants do not fully understand the risks that arise in trading credit derivatives.
Content Type(s): Publications, Bank of Canada Review articles Topic(s): Financial markets, Financial stability, Financial system regulation and policies
November 15, 1999

Markets for Government of Canada Securities in the 1990s: Liquidity and Cross-Country Comparisons

Bank of Canada Review - Autumn 1999 Toni Gravelle
In this article, the author reviews the factors behind the recent evolution of liquidity in the market for Government of Canada (GoC) securities. He finds that liquidity has been supported by changes in the structure of the market, notably the introduction and increasing size of benchmark bond issues. He also notes that while the GoC bond market has generally benefited from changes in market structure, liquidity in the treasury bill market has decreased since the mid-1990s, largely because of the declining supply of these securities. This article also presents some comparisons of liquidity in the government securities markets of other industrialized countries and finds that liquidity in the Canadian market appears to compare favourably with all but the large U.S. Treasury market.
Content Type(s): Publications, Bank of Canada Review articles Topic(s): Financial markets

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The Economy, Plain and Simple

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Financial System Review articles

Journal publications

Refereed Journals