Staff discussion papers are completed staff research studies on a wide variety of subjects relevant to central bank policy.
281
result(s)
Stablecoins and Their Risks to Financial Stability
Staff Discussion Paper 2022-20
Cameron MacDonald,
Laura Zhao
What risks could stablecoins pose to the financial system? We argue that the stabilization mechanisms of stablecoins give rise to the risk of confidence runs, which can propagate to broader cryptoasset markets and the traditional financial sector. We also argue that stablecoins can contribute to financial stability risks by facilitating the buildup of leverage and liquidity mismatch in decentralized finance. Such risks cannot be addressed by ensuring the price stability of stablecoins alone. Finally, we explore the potential implications of stablecoins for the current system of bank-intermediated credit and for monetary policy.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Digital currencies and fintech,
Financial institutions,
Financial markets,
Financial stability,
Financial system regulation and policies
JEL Code(s):
E,
E4,
E42,
E44,
E5,
E58,
G,
G2,
G23
Calculating Effective Degrees of Freedom for Forecast Combinations and Ensemble Models
Staff Discussion Paper 2022-19
James Younker
This paper derives a calculation for the effective degrees of freedom of a forecast combination under a set of general conditions for linear models. Computing effective degrees of freedom shows that the complexity cost of a forecast combination is driven by the parameters in the weighting scheme and the weighted average of parameters in the auxiliary models.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Econometric and statistical methods
JEL Code(s):
C,
C0,
C01,
C02,
C1,
C13,
C5,
C50,
C51,
C52,
C53
COVID-19 and Financial Stability: Practice Ahead of Theory
Staff Discussion Paper 2022-18
Jing Yang,
Hélène Desgagnés,
Grzegorz Halaj,
Yaz Terajima
The COVID-19 pandemic uncovered policy challenges related to the economic measures that were taken to support the economy. Two years later, we attempt to identify the broader impact of these measures and research that needs to follow.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Coronavirus disease (COVID-19),
Financial stability,
Financial system regulation and policies
JEL Code(s):
E,
E5,
E58,
E6,
E61,
G,
G2,
G21,
H,
H3,
H8,
H84
Cash, COVID-19 and the Prospects for a Canadian Digital Dollar
Staff Discussion Paper 2022-17
Walter Engert,
Kim Huynh
We provide an analysis of cash trends in Canada before and during the COVID-19 pandemic. We also consider the potential two scenarios for issuance of a central bank digital currency in Canada: the emergence of a cashless society or the widespread use of an alternative digital currency in Canada. Finally, we discuss the Canadian experience in maintaining cash as an efficient and accessible method of payment and store of value.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Bank notes,
Central bank research,
Coronavirus disease (COVID-19),
Digital currencies and fintech,
Econometric and statistical methods
JEL Code(s):
C,
C1,
C12,
C9,
E,
E4,
O,
O5,
O54
Income Inequality in Canada
Staff Discussion Paper 2022-16
Sarah Burkinshaw,
Yaz Terajima,
Carolyn A. Wilkins
Data show that income inequality in Canada increased substantially during the 1980s and first half of the 1990s but has been relatively stable over the past 25 years. This increase was felt mainly by low-income earners and younger people, while older people benefited from higher retirement income.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Central bank research,
Labour markets,
Monetary and financial indicators
JEL Code(s):
D,
D3,
D31,
D6,
D63,
I,
I2,
I24,
I3,
I32,
J,
J3,
J31,
J32,
N,
N3,
N32
Canadians’ Access to Cash Before and During the COVID-19 Pandemic
Staff Discussion Paper 2022-15
Heng Chen,
Marie-Hélène Felt
This paper studies Canadians’ access to cash using the geographical distribution of automated banking machines (ABMs). During the pandemic, there have been no sustained adverse effects on cash accessibility.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Financial services,
Regional economic developments
JEL Code(s):
J,
J1,
J15,
O,
O1,
R,
R5,
R51
The Business Leaders’ Pulse—An Online Business Survey
Staff Discussion Paper 2022-14
Tony Chernis,
Chris D'Souza,
Kevin MacLean,
Tasha Reader,
Joshua Slive,
Farrukh Suvankulov
This paper introduces the Business Leaders’ Pulse, a new online survey conducted each month. It is designed to provide timely and flexible input into the Bank of Canada’s monetary policy decision making by asking firms about their sales and employment growth expectations, the risks to their business outlook, and topical questions that address specific information needs of the Bank.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Monetary policy and uncertainty,
Recent economic and financial developments
JEL Code(s):
C,
C8,
C83,
D,
D2,
D22,
E,
E3,
E32
Settlement Balances Deconstructed
Staff Discussion Paper 2022-13
Parnell Chu,
Grahame Johnson,
Scott Kinnear,
Karen McGuinness,
Matthew McNeely
Because of the COVID-19 pandemic, public interest in the Bank’s balance sheet and, more specifically, the size of settlement balances, has grown. This paper deconstructs the concept of settlement balances and provides some context on their history, current state and possible future evolution.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Central bank research,
Coronavirus disease (COVID-19),
Financial markets,
Monetary policy implementation
JEL Code(s):
E,
E5,
E58,
E59,
E6,
G,
G0,
G01
Nowcasting Canadian GDP with Density Combinations
Staff Discussion Paper 2022-12
Tony Chernis,
Taylor Webley
We present a tool for creating density nowcasts for Canadian real GDP growth. We demonstrate that the combined densities are a reliable and accurate tool for assessing the state of the economy and risks to the outlook.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Econometric and statistical methods
JEL Code(s):
C,
C5,
C52,
C53,
E,
E3,
E7