November 17, 2016
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2373
result(s)
November 17, 2016
Recent Changes to the Bank of Canada’s Emergency Lending Assistance Policy
Emergency Lending Assistance (ELA) is a discretionary last-resort collateralized loan or ad-vance by the Bank of Canada to eligible financial institutions (FIs) and financial market infrastructures (FMIs) facing serious liquidity problems. In December 2015, the Bank revised its ELA policy to (i) replace the requirement for an FI’s solvency with the requirement for a credible recovery and resolution framework; (ii) include mortgages as eligible collateral; and (iii) clarify both the eligibility requirements for FMIs and provincially regulated deposit-taking FIs.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Financial stability,
Financial system regulation and policies,
Lender of last resort
JEL Code(s):
E,
E5,
E58,
G,
G0,
G01,
G2
November 17, 2016
Market Operations and Liquidity Provision at the Bank of Canada
The Bank of Canada’s framework for market operations and liquidity provision describes how and when central bank liquidity might be offered with regards to the implementation of monetary policy and for supporting the stability of the Canadian financial system. Market participants can therefore plan their transactions knowing that the Bank stands ready to help manage system liquidity to support its objectives for monetary policy and financial stability.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Financial markets,
Financial stability,
Monetary policy framework,
Monetary policy implementation,
Monetary policy transmission,
Payment clearing and settlement systems
JEL Code(s):
E,
E4,
E42,
E5,
E52,
E58,
G,
G0,
G01
November 17, 2016
Reinventing the Role of Central Banks in Financial Stability
Central banks contribute importantly to the promotion of financial stability given their sys-tem-wide macro-financial perspective and existing roles as lender of last resort and overseer of systemic payment systems. Since the global financial crisis, the financial system role of central banks has expanded to place more emphasis on the prevention of financial stress and crises. Central banks work with other responsible authorities to enhance financial system resilience and to assess and mitigate financial vulnerabilities and systemic risk.
Content Type(s):
Publications,
Bank of Canada Review articles
Topic(s):
Financial stability,
Financial system regulation and policies,
Lender of last resort,
Monetary policy framework
JEL Code(s):
E,
E4,
E42,
E5,
E58,
E6,
E61,
G,
G2,
G28
The Digital Economy—Insight from a Special Survey with IT Service Exporters
Staff Discussion Paper 2016-21
Wei Dong,
James Fudurich,
Lena Suchanek
Information technology (IT) is an increasingly integral part of everyday business and personal life reflecting the ongoing and accelerating digital transformation of the economy. In this paper, we present information gathered from a survey with export-oriented firms in the Canadian IT service industry and consultations with industry associations aimed at shedding light on this small but highly dynamic sector.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Firm dynamics,
Service sector
JEL Code(s):
D,
D2,
D22,
L,
L8,
L86,
O,
O3,
O33
Monetary Policy Tradeoffs Between Financial Stability and Price Stability
Staff Working Paper 2016-49
Malik Shukayev,
Alexander Ueberfeldt
We analyze the impact of interest rate policy on financial stability in an environment where banks can experience runs on their short-term liabilities, forcing them to sell assets at fire-sale prices.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Financial stability,
Monetary policy framework,
Monetary policy transmission
JEL Code(s):
D,
D6,
D62,
E,
E3,
E32,
E4,
E44,
G,
G0,
G01
Business Cycles in Small, Open Economies: Evidence from Panel Data Between 1900 and 2013
Staff Working Paper 2016-48
Thuy Lan Nguyen,
Wataru Miyamoto
Using a novel data set for 17 countries dating from 1900 to 2013, we characterize business cycles in both small developed and developing countries in a model with financial frictions and a common shock structure. We estimate the model jointly for these 17 countries using Bayesian methods.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Economic models,
International topics
JEL Code(s):
E,
E1,
E13,
E3,
E32,
F,
F4,
F41,
F44
Managing Risk Taking with Interest Rate Policy and Macroprudential Regulations
Staff Working Paper 2016-47
Simona Cociuba,
Malik Shukayev,
Alexander Ueberfeldt
We develop a model in which a financial intermediary’s investment in risky assets—risk taking—is excessive due to limited liability and deposit insurance and characterize the policy tools that implement efficient risk taking.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Financial system regulation and policies,
Monetary policy framework
JEL Code(s):
E,
E4,
E44,
E5,
E52,
G,
G1,
G11,
G18
Fragility of Resale Markets for Securitized Assets and Policy of Asset Purchases
Staff Working Paper 2016-46
Martin Kuncl
Markets for securitized assets were characterized by high liquidity prior to the recent financial crisis and by a sudden market dry-up at the onset of the crisis. A general equilibrium model with heterogeneous investment opportunities and information frictions predicts that, in boom periods or mild recessions, the degree of adverse selection in resale markets for securitized assets is limited because of the reputation-based guarantees by asset originators.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Credit and credit aggregates,
Economic models,
Financial markets,
Financial stability,
Financial system regulation and policies
JEL Code(s):
E,
E3,
E32,
E5,
G,
G0,
G01,
G2
Interpreting Volatility Shocks as Preference Shocks
Staff Working Paper 2016-45
Shaofeng Xu
This paper examines the relationship between volatility shocks and preference shocks in an analytically tractable endogenous growth model with recursive preferences and stochastic volatility. I show that there exists an explicit mapping between volatility shocks and preference shocks, and a rise in volatility generates the same impulse responses of macroeconomic aggregates as a negative preference shock.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Economic models
JEL Code(s):
E,
E2,
E3