May 11, 2017
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2378
result(s)
May 11, 2017
Wholesale Funding of the Big Six Canadian Banks
The Big Six Canadian banks are a dominant component of the Canadian financial system. How they finance their business activities is fundamental to how effective they are. Retail and commercial deposits along with wholesale funding represent the two major sources of funds for Canadian banks. What wholesale funding instruments do the Big Six banks use? How do they choose between different funding sources, funding strategies and why? How have banks changed their funding mix since the 2007–09 global financial crisis?
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Financial institutions,
Financial markets,
Financial system regulation and policies,
Market structure and pricing,
Wholesale funding
JEL Code(s):
E,
E4,
E44,
F,
F3,
G,
G0,
G01,
G1,
G10,
G12,
G15,
G2,
G20,
G21,
G28,
O,
O1,
O16
May 11, 2017
Why Is Global Business Investment So Weak? Some Insights from Advanced Economies
Various drivers of business investment can be used to explain the underwhelming performance of investment in advanced economies since the global financial crisis, particularly since 2014. The slow growth in aggregate demand cannot by itself explain the full extent of the recent weakness in investment, which appears to be linked primarily to the collapse of global commodity prices and a rise in economic uncertainty. Looking ahead, business investment growth is likely to remain slower than in the pre-crisis period, largely because of structural factors such as population aging.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Business fluctuations and cycles,
Domestic demand and components,
Economic models,
International topics,
Monetary policy and uncertainty,
Recent economic and financial developments
JEL Code(s):
C,
C2,
C22,
D,
D2,
D24,
D8,
D80,
E,
E2,
E22,
F,
F0,
F01,
G,
G3,
G31
Vertical Specialization and Gains from Trade
Staff Working Paper 2017-17
Patrick Alexander
Multi-stage production is widely recognized as an important feature of the modern global economy. This feature has been incorporated into many state-of-the-art quantitative trade models, and has been shown to deliver significant additional gains from international trade.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Economic models,
International topics,
Trade integration
JEL Code(s):
F,
F1,
F11,
F14,
F6,
F60
Downward Nominal Wage Rigidity Meets the Zero Lower Bound
Staff Working Paper 2017-16
Robert Amano,
Stefano Gnocchi
We add downward nominal wage rigidity to a standard New Keynesian model with sticky prices and wages, where the zero lower bound on nominal interest rates is allowed to bind. We find that wage rigidity not only reduces the frequency of zero bound episodes but also mitigates the severity of corresponding recessions.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation targets,
Labour markets,
Monetary policy framework
JEL Code(s):
E,
E2,
E24,
E3,
E32,
E5,
E52
Constrained Efficiency with Adverse Selection and Directed Search
Staff Working Paper 2017-15
Mohammad Davoodalhosseini
Constrained efficient allocation (CE) is characterized in a model of adverse selection and directed search (Guerrieri, Shimer, and Wright (2010)). CE is defined to be the allocation that maximizes welfare, the ex-ante utility of all agents, subject to the frictions of the environment.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Economic models,
Financial markets,
Financial system regulation and policies,
Market structure and pricing
JEL Code(s):
D,
D8,
D82,
D83,
E,
E2,
E24,
G,
G1,
J,
J3,
J31,
J6,
J64
Strategic Complementarities and Money Market Fund Liquidity Management
Staff Working Paper 2017-14
Jonathan Witmer
Following the financial crisis, there has been increased regulatory focus on the management of liquidity in mutual funds and, specifically, whether funds hold enough liquidity to guard against the potential for investor runs.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Financial institutions,
Financial markets
JEL Code(s):
F,
F3,
F30,
G,
G0,
G01,
G1,
G18,
G2,
G20
Markov‐Switching Three‐Pass Regression Filter
Staff Working Paper 2017-13
Pierre Guérin,
Danilo Leiva-Leon,
Massimiliano Marcellino
We introduce a new approach for the estimation of high-dimensional factor models with regime-switching factor loadings by extending the linear three-pass regression filter to settings where parameters can vary according to Markov processes.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Econometric and statistical methods
JEL Code(s):
C,
C2,
C22,
C23,
C5,
C53
Accounting for Real Exchange Rates Using Micro‐Data
Staff Working Paper 2017-12
Mario J. Crucini,
Anthony Landry
The classical dichotomy predicts that all of the time-series variance in the aggregate real exchange rate is accounted for by non-traded goods in the consumer price index (CPI) basket because traded goods obey the Law of One Price. In stark contrast, Engel (1999) claimed the opposite: that traded goods accounted for all of the variance.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Exchange rates,
International financial markets,
Trade integration
JEL Code(s):
F,
F3
April 2017 Annual Reassessment of Potential Output Growth in Canada
Staff Analytical Note 2017-5
Andrew Agopsowicz,
Bassirou Gueye,
Natalia Kyui,
Youngmin Park,
Mohanad Salameh,
Ben Tomlin
This note summarizes the Bank of Canada’s annual reassessment of potential output growth, conducted for the April 2017 Monetary Policy Report. Potential output growth is projected to increase from 1.3 per cent in 2017 to 1.6 per cent by 2020.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Labour markets,
Potential output,
Productivity
JEL Code(s):
E,
E0,
E00,
E2,
E22,
E23,
E24,
E3,
E37,
E6