Perceived interconnections between Canadian banks and non-bank financial intermediaries under stress Staff Analytical Note 2025-26 Javier Ojea Ferreiro I study the links between Canadian banks and non-bank financial intermediaries (NBFIs) by observing co-movements in stock prices. Perceived interconnections increased before the COVID-19 pandemic but have since stabilized, with the strongest ties seen between large banks and NBFIs. The secured credit line extended to Home Trust, a non-bank mortgage lender that experienced severe funding stress in 2017, significantly reduced banks' risk exposure to NBFIs during this episode. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Econometric and statistical methods, Financial institutions, Financial stability JEL Code(s): C, C5, C58, G, G0, G01, G2, G21, G23, G3, G32
Do Protectionist Trade Policies Integrate Domestic Markets? Evidence from the Canada-U.S. Softwood Lumber Dispute Staff Working Paper 2020-10 Jinggang Guo, Craig Johnston We consider the effects of protectionist trade policies on international and domestic market integration, using evidence from the long-standing softwood lumber trade dispute between Canada and the United States. Content Type(s): Staff research, Staff working papers Research Topic(s): International topics, Market structure and pricing, Trade integration JEL Code(s): F, F1, F13, Q, Q1, Q17
What Explains Month-End Funding Pressure in Canada? Staff Discussion Paper 2017-9 Christopher S. Sutherland The Canadian overnight repo market persistently shows signs of latent funding pressure around month-end periods. Both the overnight repo rate and Bank of Canada liquidity provision tend to rise in these windows. This paper proposes three non-mutually exclusive hypotheses to explain this phenomenon. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Financial markets, Interest rates, Monetary policy framework, Monetary policy implementation, Monetary policy transmission JEL Code(s): E, E4, E41, E43, E5, E52, E58, F, F3, F36, G, G1, G14, G15, G2, G21
Corporate Risk Taking and Ownership Structure Staff Working Paper 2010-3 Teodora Paligorova This paper investigates the determinants of corporate risk taking. Shareholders with substantial equity ownership in a single company may advocate conservative investment policies due to greater exposure to firm risk. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial markets, International topics JEL Code(s): G, G3, G31, G34
Testing for the Diffusion Matrix in a Continuous-Time Markov Process Model with Applications to the Term Structure of Interest Rates Staff Working Paper 2015-17 Fuchun Li The author proposes a test for the parametric specification of each component in the diffusion matrix of a d-dimensional diffusion process. Overall, d (d-1)/2 test statistics are constructed for the off-diagonal components, while d test statistics are constructed for the main diagonal components. Content Type(s): Staff research, Staff working papers Research Topic(s): Asset pricing, Econometric and statistical methods, Interest rates JEL Code(s): C, C1, C12, C14, E, E1, E17, E4, E43, G, G1, G12, G2, G20
New Phillips Curve with Alternative Marginal Cost Measures for Canada, the United States, and the Euro Area Staff Working Paper 2001-25 Edith Gagnon, Hashmat Khan Recent research on the new Phillips curve (NPC) (e.g., Galí, Gertler, and López-Salido 2001a) gives marginal cost an important role in capturing pressures on inflation. In this paper we assess the case for using alternative measures of marginal cost to improve the empirical fit of the NPC. Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Inflation and prices JEL Code(s): E, E3, E31
Understanding Trend Inflation Through the Lens of the Goods and Services Sectors Staff Working Paper 2020-45 Yunjong Eo, Luis Uzeda, Benjamin Wong The goods and services sectors have experienced considerably different dynamics over the past three decades. Our goal in this paper is to understand how such contrasting behaviors at the sectoral level affect the aggregate level of trend inflation dynamics. Content Type(s): Staff research, Staff working papers Research Topic(s): Econometric and statistical methods, Inflation and prices, Monetary policy transmission JEL Code(s): C, C1, C11, C3, C32, E, E3, E31, E5, E52
August 22, 2012 Globalisation, Financial Stability and Employment Remarks Mark Carney Canadian Auto Workers (CAW) Toronto, Ontario Governor Mark Carney discusses globalization, financial stability and employment. Content Type(s): Press, Speeches and appearances, Remarks
May 23, 2003 The Bank of Canada: Moving Towards Transparency Bank of Canada Review - Spring 2003 John Chant During the 1990s the Bank of Canada made several changes that transformed its conduct of monetary policy. In the 1960s and 1970s, policy decisions were made in an environment characterized by instrument opaqueness and goal opaqueness, which tended to shield the Bank's operations from scrutiny and accountability. Since the 1970s the Bank has moved towards transparency and openness by rejecting multiple policy instruments and adopting a single, well-defined goal of inflation control. A recent survey has shown that the Bank of Canada is in the middle range of central banks with regard to its transparency and has lost points for not publishing the forecasts that shape its policy or the minutes and voting records of its governing body. Chant suggests that the public has benefited significantly from the changes the Bank has made, but that it should continue to support research on the benefits of low and stable inflation and continually inform other policy-makers and the public of the results. Content Type(s): Publications, Bank of Canada Review articles
Labour Force Participation: A Comparison of the United States and Canada Staff Analytical Note 2017-9 James Ketcheson, Natalia Kyui, Benoit Vincent This note explores the drivers behind the recent increase in the US participation rate in the labour market and assesses the likelihood of a similar gain in Canada. The growth in the US participation rate has largely been due to a pickup in the participation of prime-age workers following a post-recession decline. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Labour markets, Recent economic and financial developments JEL Code(s): E, E2, E24, J, J2, J21