Revisiting the Monetary Sovereignty Rationale for CBDCs Staff discussion paper 2021-17 Skylar Brooks One argument for central bank digital currencies (CBDCs) is that without them, private and foreign digital monies could displace domestic currencies, threatening the central bank’s monetary policy and lender of last resort capabilities. I revisit this monetary sovereignty rationale and offer a wider view—one that considers a broader set of currency functions and captures important cross-country variation. Content Type(s): Staff research, Staff discussion papers JEL Code(s): E, E4, E41, E42, E5, E52, E58, H, H1, H12, H6, H63 Research Theme(s): Financial system, Financial stability and systemic risk, Monetary policy, Monetary policy framework and transmission, Money and payments, Digital assets and fintech
February 17, 2011 Conference Summary: Financial Globalization and Financial Instability Bank of Canada Review - Winter 2010-2011 Scott Hendry The Bank of Canada’s annual conference, held in October 2010, brought together leading researchers from universities and central banks around the world. Content Type(s): Publications, Bank of Canada Review articles
Unintended consequences of liquidity regulation Staff analytical note 2025-28 Omar Abdelrahman, Josef Schroth When a bank holds a lot of safe assets, it is well situated to deal with funding stress. But when all banks hold a lot of safe assets, a pecuniary externality implies that their (wholesale) funding costs increase. This reduces banks’ ability to hold capital buffers and thus, paradoxically, increases the frequency of funding stress. Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E4, E44, E6, G, G2, G21, G28 Research Theme(s): Financial system, Financial institutions and intermediation, Financial system regulation and oversight
Monetary Policy and Cross-Border Interbank Market Fragmentation: Lessons from the Crisis Staff working paper 2020-34 Tobias Blattner, Jonathan Swarbrick We present a two-country model featuring risky lending and cross-border interbank market frictions. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, E44, E5, E52, F, F3, F32, F36 Research Theme(s): Financial markets and funds management, International markets and currencies, Financial system, Financial institutions and intermediation, Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation
August 19, 2010 Bank of Canada Review - Summer 2010 Examination of how, when the policy interest rate is at or near zero, different monetary policy frameworks might help to lower the risk and economic cost of such a scenario; review of the findings of recent Bank of Canada research on the relative merits of inflation targeting and price-level targeting (PLT) for a small open economy; examination of monetary policy being used to counteract financial imbalances; conference summary: new frontiers in monetary policy design. Content Type(s): Publications, Bank of Canada Review
November 14, 2013 Assessing Financial System Vulnerabilities: An Early Warning Approach Bank of Canada Review - Autumn 2013 Gurnain Pasricha, Tom Roberts, Ian Christensen, Brad Howell This article focuses on a quantitative method to identify financial system vulnerabilities, specifically, an imbalance indicator model (IIM) and its application to Canada. An IIM identifies potential vulnerabilities in a financial system by comparing current economic and financial data with data from periods leading up to past episodes of financial stress. It complements other sources of information - including market intelligence and regular monitoring of the economy - that policy-makers use to assess vulnerabilities. Content Type(s): Publications, Bank of Canada Review articles JEL Code(s): E, E6, E66, G, G0, G01
August 23, 2011 How People Think and How It Matters Remarks Jean Boivin Canadian Association for Business Economics Kingston, Ontario In his speech entitled “How People Think and How it Matters,” delivered to the Canadian Association for Business Economics, Deputy Governor Jean Boivin reviews various ways people form expectations and how these affect monetary policy. Content Type(s): Press, Speeches and appearances, Remarks
A Dynamic Factor Model for Nowcasting Canadian GDP Growth Staff working paper 2017-2 Tony Chernis, Rodrigo Sekkel This paper estimates a dynamic factor model (DFM) for nowcasting Canadian gross domestic product. The model is estimated with a mix of soft and hard indicators, and it features a high share of international data. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C3, C32, C38, C5, C53, E, E3, E37 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Monetary policy, Real economy and forecasting
Understanding Firms’ Inflation Expectations Using the Bank of Canada’s Business Outlook Survey Staff working paper 2016-7 Simon Richards, Matthieu Verstraete Inflation expectations are a key determinant of actual and future inflation and thus matter for the conduct of monetary policy. We study how firms form their inflation expectations using quarterly firm-level data from the Bank of Canada’s Business Outlook Survey, spanning the 2001 to 2015 period. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C1, C2, C25, D, D2, D21, D8, D84, E, E3, E31, E5, E52, E58 Research Theme(s): Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission
Using Payments Data to Nowcast Macroeconomic Variables During the Onset of COVID-19 Staff working paper 2021-2 James Chapman, Ajit Desai We use retail payment data in conjunction with machine learning techniques to predict the effects of COVID-19 on the Canadian economy in near-real time. Our model yields a significant increase in macroeconomic prediction accuracy over a linear benchmark model. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C5, C53, C55, E, E3, E37, E4, E42, E5, E52 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Monetary policy, Real economy and forecasting, Money and payments, Retail payments