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Deputy Governor Toni Gravelle speaks about market liquidity measures taken during the COVID-19 pandemic, and addresses recent turmoil in the US and international banking sectors.

In this article, author Charles Spencer reviews the complex process of developing the new series, which represents a dramatic change for Canada. The leading-edge security features made possible by the new substrate, the cost savings of the move to a polymer base and the environmental advantages of the new notes are also examined.

As a native Montrealer, I am particularly pleased to be coming home to deliver my first speech as Senior Deputy Governor of the Bank of Canada.

Using Bank Note Distribution System data on the demand for cash up to September 2020, we find that demand was strong. This is true even though cash use for payments declined early in the pandemic. When mobility restrictions and lockdown measures were eased, cash use for payments increased sharply but remained less popular than electronic methods of payment.

There is an old saying, “Knowledge is gained from experience, and experience is gained from mistakes.” In Canada, we made our mistakes early and often in the 1970s and 1980s. Our fiscal situation deteriorated sharply, inflation surged to double-digit levels, and a few small regional banks collapsed.

The Annual Report outlines the Bank’s activities and achievements in 2018. It includes the financial statements and a message from Governor Stephen S. Poloz.

Deputy Governor Lynn Patterson discusses the efforts in multiple jurisdictions to strengthen LIBOR and similar benchmarks and work underway in Canada to consider a new risk-free benchmark for the Canadian dollar market.

Despite the efficiency gains that accompany automation, most large futures exchanges have been reluctant to move away from the traditional trading floor, citing early evidence that open outcry exchanges were more liquid than electronic exchanges. More recent studies, however, suggest that electronic trading is superior to open outcry in many respects, including liquidity. In this article, the author compares the two trading systems. Although many exchanges are shifting towards electronic trading, there are still several obstacles to this transition. But as technology rapidly reduces the cost of automation and increases the demand for global 24-hour trading, a worldwide transition to electronic order-matching will likely be the next important milestone for futures exchanges. Less-automated exchanges (including the Canadian futures exchanges) will undoubtedly continue to study and promote automation in order to keep pace with technological innovations.

Governor Poloz talks about the economic benefits expected from disruptive digital technologies and the implications for monetary policy.

This paper investigates how a low or negative overnight interest rate might affect the Canadian repo markets. The main conclusion is that the repo market for general collateral will continue to function effectively.