Furor over the Fed : Presidential Tweets and Central Bank Independence Staff analytical note 2019-33 Antoine Camous, Dmitry Matveev We illustrate how market data can be informative about the interactions between monetary and fiscal policy. Federal funds futures are private contracts that reflect investor’s expectations about monetary policy decisions. Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E4, E44, E5, E52, E58 Research Theme(s): Financial markets and funds management, Market functioning, Financial system, Financial stability and systemic risk, Monetary policy, Monetary policy framework and transmission
Climate-Related Flood Risk to Residential Lending Portfolios in Canada Staff discussion paper 2023-33 Craig Johnston, Geneviève Vallée, Hossein Hosseini Jebeli, Brett Lindsay, Miguel Molico, Marie-Christine Tremblay, Aidan Witts We assess the potential financial risks of current and projected flooding caused by extreme weather events in Canada. We focus on the residential real estate secured lending (RESL) portfolios of Canadian financial institutions (FIs) because RESL portfolios are an important component of FIs’ balance sheets and because the assets used to secure such loans are immobile and susceptible to climate-related extreme weather events. Content Type(s): Staff research, Staff discussion papers JEL Code(s): C, C8, C81, G, G2, G21, Q, Q5, Q54 Research Theme(s): Financial system, Financial stability and systemic risk, Household and business credit, Structural challenges, Climate change
Risk Amplification Macro Model (RAMM) Technical report No. 123 Kerem Tuzcuoglu The Risk Amplification Macro Model (RAMM) is a new nonlinear two-country dynamic model that captures rare but severe adverse shocks. The RAMM can be used to assess the financial stability implications of both domestic and foreign-originated risk scenarios. Content Type(s): Staff research, Technical reports JEL Code(s): C, C5, C51, E, E3, E37, E4, E44, F, F4, F44 Research Theme(s): Financial system, Financial stability and systemic risk, Models and tools, Economic models, Monetary policy, Real economy and forecasting
Understanding Inflation Dynamics: The Role of Government Expenditures Staff working paper 2023-30 Chang Liu, Yinxi Xie We study the impact government expenditure has on inflation. We find that changes in government expenditure account for a substantial portion of inflation variations. We also find that inflation and inflation expectations respond negatively to fiscal spending shocks, reaffirming the supply-side channel through which inflation responds to fiscal expansions. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E3, E6, E62, E63 Research Theme(s): Models and tools, Economic models, Monetary policy, Inflation dynamics and pressures
Decentralized finance: Innovations and challenges Staff analytical note 2023-15 Jonathan Chiu, Hanna Yu Decentralized finance surged in popularity around 2020. We explore its value and limitations and highlight some potential regulatory concerns. Content Type(s): Staff research, Staff analytical notes JEL Code(s): G, G1, G2 Research Theme(s): Financial system, Financial stability and systemic risk, Money and payments, Digital assets and fintech, Payment and financial market infrastructures
January 5, 2002 Inflation Targeting in Canada: Experience and Lessons Remarks David Dodge Central Bank Governor's Panel on Inflation Targeting at a joint session of The American Economic Association and the North American Economics and Finance Association Atlanta, Georgia In the 1970s and 1980s we found - in common with many other countries - that high and variable rates of inflation created a lot of economic damage. And it took a long time and a lot of work with various monetary policy frameworks before we got back on track. Content Type(s): Press, Speeches and appearances, Remarks
December 23, 2002 Financial System Review - December 2002 The financial system, which consists of financial institutions, financial markets, and clearing and settlement systems, lays an important role in a nation’s economy. Sound and efficientfinancial systems can make a significant contribution to economic growth. Content Type(s): Publications, Financial Stability Report
Considerations for the allocation of non-default losses by financial market infrastructures Staff analytical note 2022-16 Daniele Costanzo, Radoslav Raykov Non-default losses of financial market infrastructures (FMIs) have gained attention due to their potential impacts on FMIs and FMI participants, and the lack of a common approach to address them. A key question is, who should absorb these losses? Content Type(s): Staff research, Staff analytical notes JEL Code(s): G, G2, G23, G28, G3, G32, G33 Research Theme(s): Financial system, Financial stability and systemic risk, Money and payments, Payment and financial market infrastructures
Evolving Temperature Dynamics in Canada: Preliminary Evidence Based on 60 Years of Data Staff working paper 2021-22 Robert Amano, Marc-André Gosselin, Julien McDonald-Guimond Are summers getting hotter? Do daily temperatures change more than they used to? Using daily Canadian temperature data from 1960 to 2020 and modern econometric methods, we provide economists and policy-makers evidence on the important climate change issue of evolving temperatures. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C2, C22, Q, Q5, Q54 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Structural challenges, Climate change
Foreign Exchange Fixings and Returns Around the Clock Staff working paper 2021-48 Ingomar Krohn, Philippe Mueller, Paul Whelan We document a new empirical finding in the foreign exchange market: currency returns show systematic reversals around the benchmark fixings. Specifically, the US dollar, on average, appreciates in the hours before fixes and depreciates after fixes. Content Type(s): Staff research, Staff working papers JEL Code(s): F, F3, F31, G, G1, G15 Research Theme(s): Financial markets and funds management, International markets and currencies, Market functioning