Networking the Yield Curve: Implications for Monetary Policy Staff Working Paper 2021-4 Tatjana Dahlhaus, Julia Schaumburg, Tatevik Sekhposyan We study how different monetary policies affect the yield curve and interact. Our study highlights the importance of the spillover structure across the yield curve for policy-making. Content Type(s): Staff research, Staff working papers Research Topic(s): Econometric and statistical methods, Interest rates, Monetary policy implementation JEL Code(s): C, C1, C18, C2, C21, C5, C53, E, E4, E43, E44, E5, E52
March 16, 2008 Developing a Framework to Assess Financial Stability: Conference Highlights and Lessons Bank of Canada Review - Spring 2008 Olivier de Bandt, Céline Gauthier, Pierre St-Amant Central banks are still defining their approach to financial stability and are at an early stage in the development of useful models. The Bank of Canada's 2007 economic conference was organized to stimulate progress in the development of financial-stability frameworks. Among the highlights reported here are the discussions centred around three proposed frameworks: a contingent-claims-analysis framework, a semi-structural framework, and structural financial-stability models. Participants also reported on their experiences with stress-testing under the International Monetary Fund's Financial Sector Assessment Program and discussed the implications for financial stability of linkages among payment, clearing, and settlement systems. Content Type(s): Publications, Bank of Canada Review articles Research Topic(s): Financial stability, Financial system regulation and policies, Payment clearing and settlement systems
COVID-19 Hasn’t Killed Merchant Acceptance of Cash: Results from the 2023 Merchant Acceptance Survey Staff Discussion Paper 2024-2 Angelika Welte, Katrina Talavera, Liang Wang, Joy Wu The Bank of Canada’s Merchant Acceptance Survey finds that 96% of small and medium-sized businesses in Canada accepted cash in 2023. Acceptance of debit and credit cards has increased to 89%, and acceptance of digital payments has also increased. However, Canada is far from being a cashless society. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Bank notes, Digital currencies and fintech, Econometric and statistical methods JEL Code(s): C, C8, D, D2, D22, E, E4, L, L2
Consumer Credit Regulation and Lender Market Power Staff Working Paper 2024-36 Zachary Bethune, Joaquín Saldain, Eric R. Young We investigate the welfare consequences of consumer credit regulation in a dynamic, heterogeneous-agent model with endogenous lender market power. Lenders post credit offers and borrowers—some informed and others uninformed—apply for credit. We calibrate the model to match characteristics of the unsecured consumer credit market and use the calibrated model to evaluate interest rate ceilings. Content Type(s): Staff research, Staff working papers Research Topic(s): Credit and credit aggregates, Financial markets, Interest rates JEL Code(s): D, D1, D15, D4, D43, D6, D60, D8, D83, E, E2, E21, G, G5, G51
Merchant Acceptance of Cash and Credit Cards at the Point of Sale Staff Analytical Note 2018-1 Ben Fung, Kim Huynh, Kerry Nield, Angelika Welte Recent data show that the use of credit cards in Canada has been increasing, while the use of cash has been declining. At the same time, only two-thirds of small or medium-sized businesses accept credit cards. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Bank notes, Digital currencies and fintech, Econometric and statistical methods, Financial services JEL Code(s): C, C2, D, D1, E, E4, E41
SME Failures Under Large Liquidity Shocks: An Application to the COVID-19 Crisis Staff Working Paper 2023-32 Pierre-Olivier Gourinchas, Şebnem Kalemli-Özcan, Veronika Penciakova, Nicholas Sander We study the effects of financial frictions on firm exit when firms face large liquidity shocks. We develop a simple model of firm cost-minimization that introduces a financial friction that limits firms’ borrowing capacity to smooth temporary shocks to liquidity. Content Type(s): Staff research, Staff working papers Research Topic(s): Coronavirus disease (COVID-19), Firm dynamics, International topics JEL Code(s): D, D2, D21, D22, E, E6, E65, H, H8, H81
Anticipated Technology Shocks: A Re‐Evaluation Using Cointegrated Technologies Staff Working Paper 2017-11 Joel Wagner Two approaches have been taken in the literature to evaluate the relative importance of news shocks as a source of business cycle volatility. The first is an empirical approach that performs a structural vector autoregression to assess the relative importance of news shocks, while the second is a structural-model-based approach. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Productivity JEL Code(s): E, E3, E32
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 Research Topic(s): Digital currencies and fintech, Financial stability, Payment clearing and settlement systems JEL Code(s): G, G1, G2
Anonymous Credentials: Secret-Free and Quantum-Safe Staff Working Paper 2023-50 Raza Ali Kazmi, Cyrus Minwalla An anonymous credential mechanism is a set of protocols that allows users to obtain credentials from an organization and demonstrate ownership of these credentials without compromising users’ privacy. In this work, we construct the first secret-free and quantum-safe credential mechanism. Content Type(s): Staff research, Staff working papers Research Topic(s): Central bank research, Digital currencies and fintech, Payment clearing and settlement systems JEL Code(s): E, E4, E42, G, G2, G21, O, O3, O31
Demographic Origins of the Decline in Labor’s Share Staff Working Paper 2023-20 Andrew Glover, Jacob Short Declining labour market dynamism of workers results in an increasing wedge between their earnings and their marginal product as they age. This wedge and the demographic shift in the earnings shares of older workers can account for 59% of the decline in labor’s share of earnings in the United States. Content Type(s): Staff research, Staff working papers Research Topic(s): Labour markets, Productivity JEL Code(s): D, D3, D33, E, E2, E25, J, J1, J3, J6, J62