Search

Content Types

Topics

JEL Codes

Locations

Departments

Authors

Sources

Statuses

Published After

Published Before

9212 Results

November 11, 2008

The Role of Dealers in Providing Interday Liquidity in the Canadian-Dollar Market

Access to information about the future direction of the exchange rate can be extremely valuable in the foreign exchange market. Evidence presented in this article suggests that Canadian dealers are more likely to provide interday liquidity to foreign, rather than Canadian, financial customers, since foreign financial flows can be more informative about future movements in the exchange rate. The author reveals a statistical relationship between the supply of liquidity provided by non-financial firms and that provided by dealing institutions across time, and across markets, and suggests that the relationship between the positions of commercial clients and market-makers, and the role played by dealers in interday liquidity provision, has been understated in the market microstructure literature.
November 11, 2008

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

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.
December 9, 1996

The Canadian market for zero-coupon bonds

A conventional bond is a debt instrument consisting of a series of periodic coupon payments plus the repayment of the principal at maturity. As the name suggests, a zero-coupon bond has no coupon payments. It has only a single payment consisting of the repayment of the principal at maturity. The zero-coupon bond is sold at a discount and then redeemed for its face value at maturity. The return to the investor is the difference between the face value of the bond and its discounted purchase price. In this article, the author examines the investment characteristics of zero-coupon bonds. In particular, a type of zero-coupon bond known as a strip bond is discussed. A strip bond is created by stripping coupon payments from conventional bonds. The strip bond market in Canada has grown substantially since the late 1980s and is now an integral part of Canadian fixed-income markets. As well, the opportunity to trade in the strip bond market improves the liquidity and efficiency of Canadian fixed-income markets, thus helping to reduce the overall cost of borrowing to the government.
December 10, 1996

The maturity structure of household financial assets and liabilities

In this article, the author examines the maturity structure of the household sector's balance sheet and the degree of interest rate variability of household loans and financial assets. The bulk of households' interest-bearing assets and financial liabilities consists of medium- and long-term, fixed-rate instruments. The pattern of personal consumption is therefore influenced more by the wealth effects of interest rate changes than by their income effects, and the full impact of a permnent shift in interest rates on consumption will become apparent only after a lag.
June 11, 2009

Bank of Canada Review - Summer 2009

Summer 2009
Examining the incentives for banks to hold various assets on their balance sheets for use as collateral when the opportunity cost of doing so can be high; an outline of the complexity inherent in any modern risk-management system and review of possible strategies to improve the performance of risk management; causes and consequences of the changing pace of labour reallocation in Canada; description of the structure and functioning of BoC-GEM— an adaptation of the Global Economy Model— with examples of its recent application.
November 10, 1996

The market for futures contracts on Canadian bankers' acceptances

The Montreal Exchange introduced futures contracts on 3-month Canadian bankers' acceptances, known as BAX, in 1988. In this article, the author explains the nature of this new instrument, which is bought and sold on the floor of the Exchange, and its role in hedging, speculation, and arbitrage. She briefly reviews the technical aspects of the market and explains the difference between BAX contracts and forward rate agreements. She also examines the market's rapid growth and its relationship to the market for treasury bills.
Go To Page