Find our research on the financial system by keyword, author, content type, JEL code, topic or date of publication.
452
result(s)
Asymmetric Systemic Risk
Staff Working Paper 2022-19
Radoslav Raykov,
Consuelo Silva-Buston
Bank regulation presumes risks spill over more easily from large banks to the banking system than vice versa. Interestingly, we observe this is not the case. We find that the capacity to transmit risk is larger in the system-to-bank direction, leading to an increased default risk.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Financial institutions,
Financial stability,
Financial system regulation and policies
JEL Code(s):
G,
G1,
G10,
G2,
G20
The Financial Origins of Non-fundamental Risk
Staff Working Paper 2022-4
Sushant Acharya,
Keshav Dogra,
Sanjay Singh
We explore the idea that the financial sector can be a source of non-fundamental risk to the rest of the economy. We also consider whether policy can be used to reduce this risk—either by increasing the supply of publicly backed safe assets or by reducing the demand for safe assets.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Asset pricing,
Financial markets,
Financial stability
JEL Code(s):
D,
D5,
D52,
D8,
D84,
E,
E6,
E62,
G,
G1,
G10,
G12
The Countercyclical Capital Buffer and International Bank Lending: Evidence from Canada
Staff Working Paper 2021-61
David Xiao Chen,
Christian Friedrich
We examine the impact of the CCyB on foreign lending activities of Canadian banks. We show that the announcement of a tightening in another country’s CCyB leads to a decrease in the growth rate of cross-border lending between Canadian banks and borrowers in that other country.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Credit risk management,
Financial institutions,
Financial stability,
Financial system regulation and policies,
International topics
JEL Code(s):
E,
E3,
E32,
F,
F2,
F21,
F3,
F32,
G,
G2,
G21,
G28
Democratic Political Economy of Financial Regulation
Staff Working Paper 2021-59
Igor Livshits,
Youngmin Park
We offer a theory of how inefficiently lax financial regulation could arise in a democratic society.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Financial stability,
Financial system regulation and policies,
Housing,
Interest rates
JEL Code(s):
E,
E4,
E43,
E44,
G,
G0,
G01,
G2,
G21,
G28,
P,
P4,
P48
Are Bank Bailouts Welfare Improving?
Staff Working Paper 2021-56
Malik Shukayev,
Alexander Ueberfeldt
Financial sector bailouts, while potentially beneficial during a crisis, might lead to excessive risk taking if anticipated. Taking expectations and aggregate risk implications into account, we show that bailouts can be welfare improving, but only if capital adequacy constraints are sufficiently tight.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Financial institutions,
Financial stability,
Financial system regulation and policies
JEL Code(s):
D,
D6,
D62,
E,
E3,
E32,
E4,
E44,
G,
G0,
G01
More Money for Some: The Redistributive Effects of Open Market Operations
Staff Working Paper 2021-46
Christian Bustamante
I use a search-theoretic model of money to study how open market operations affect the conduct of monetary policy and what this means for households along the wealth distribution. In the model, households vary in the size and composition of their portfolios, which in turn implies that they may be unevenly affected by open market operations.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Inflation and prices,
Monetary policy,
Monetary policy implementation,
Monetary policy transmission
JEL Code(s):
E,
E2,
E21,
E3,
E32,
E5,
E52
Stressed but not Helpless: Strategic Behaviour of Banks Under Adverse Market Conditions
Staff Working Paper 2021-35
Grzegorz Halaj,
Sofia Priazhkina
Our stress-testing tool considers banks under stress that can strategically manage their balance sheets. Using confidential Canadian supervisory data, we assess whether bank behaviour to maximize shareholder value can amplify a hypothetical stress scenario.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Central bank research,
Economic models,
Financial institutions,
Financial stability,
Financial system regulation and policies
JEL Code(s):
C,
C6,
C63,
C7,
C72,
G,
G2,
G21
An Optimal Macroprudential Policy Mix for Segmented Credit Markets
Staff Working Paper 2021-31
Jelena Zivanovic
How can macroprudential policy and monetary policy stabilize segmented credit markets? Is there a trade-off between financial stability and price stability? I use a theoretical model to evaluate the performance of alternative policies and find the optimal mix of macroprudential and monetary policy in response to aggregate shocks.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Credit and credit aggregates,
Credit risk management,
Financial stability,
Financial system regulation and policies
JEL Code(s):
E,
E3,
E30,
E4,
E44,
E5,
E50
Bank Runs, Bank Competition and Opacity
Staff Working Paper 2021-30
Toni Ahnert,
David Martinez-Miera
How is the stability of the financial sector affected by competition in the deposit market and by decisions banks make about transparency? We find that policies that aim to increase bank competition lead to higher bank deposit rates, increasing both withdrawal incentives and instability.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Financial institutions,
Financial markets,
Financial stability,
Financial system regulation and policies,
Wholesale funding
JEL Code(s):
G,
G0,
G01,
G2,
G21