April 21, 2021 Monetary Policy Report – April 2021 As the economy recovers from the COVID-19 pandemic, the Bank is forecasting growth of around 6 ½ percent this year, slowing to about 3 ¾ percent in 2022 and 3 ¼ percent in 2023. Content Type(s): Publications, Monetary Policy Report
March 27, 2015 Annual Report 2014 In 2014, inflation remained very close to target, the economy grew at a reasonable pace and there was no material increase in financial stability risks. Nonetheless, the economy still struggled against significant global headwinds. The 2014 Annual Report highlights the Bank of Canada’s key activities and achievements over the year, including a message from Governor Stephen S. Poloz, Management’s Discussion and Analysis, and the 2014 Financial Statements. Content Type(s): Publications, Annual Report
June 18, 2005 Recent Trends in Canadian Defined-Benefit Pension Sector Investment and Risk Management Bank of Canada Review - Summer 2005 Eric Tuer, Elizabeth Woodman Defined-benefit (DB) pension plans account for the majority of employer pension fund assets. In recent years, a number of DB plans have become underfunded, in sharp contrast to the 1990s, when many plans had large actuarial surpluses. The deterioration in the financial health of DB plans has underscored various longer-term structural issues that could make it increasingly difficult for plan sponsors to manage the financial risks of these plans. Tuer and Woodman examine how funding deficits, a greater focus on plan liabilities, a low yield environment, and changing investment beliefs are influencing investment decisions in the Canadian DB pension sector. They review the funding of DB plans, changing views on the equity-risk premium, and the shift towards liability-centred approaches to investment and how these developments are affecting pension sector investment. They also consider additional influences on the pension sector, including the limited supply of long-term bonds, the elimination of the foreign-property rule, and the movement towards fair-value accounting and a financial-economics approach to actuarial valuation, as well as their implications for financial markets. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Financial institutions, Recent economic and financial developments
December 15, 2016 Financial System Review - December 2016 This issue of the Financial System Review reflects the Bank’s judgment that the overall level of risk to Canada’s financial system remains largely unchanged from six months ago. The Bank continues to highlight two key vulnerabilities related to Canadian households: high levels of indebtedness and housing market imbalances. A third ongoing vulnerability is the potential for fragility in fixed-income market liquidity. Content Type(s): Publications, Financial Stability Report
April 15, 2006 Issues in Inflation Targeting: A Summary of the Bank of Canada Conference Held 28-29 April 2005 Bank of Canada Review - Spring 2006 Robert Amano, Raphael Solomon The Bank of Canada's 2005 conference focused on two critical issues: price-level targets versus inflation targets, and the appropriate level of inflation. Session topics included new methodological approaches to examining the validity of the New Keynesian Phillips curve for Canada; the monetary policy implications of border effects and the financial-accelerator model; the zero lower bound on nominal interest rates; and inflation and welfare in general-equilibrium macroeconomic models. A panel of invited speakers discussed the issues of each session, and two distinguished speakers gave their perspectives on inflation. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Inflation and prices, Inflation targets, Monetary policy framework
November 29, 2011 With a Little Help from Your Friends: The Virtues of Global Economic Coordination Remarks John Murray State University of New York at Plattsburgh Plattsburgh, New York Deputy Governor John Murray discusses the importance of global economic policy coordination in a speech at the State University of New York College in Plattsburgh, New York. Content Type(s): Press, Speeches and appearances, Remarks
November 9, 1994 The Bank of Canada's new Quarterly Projection Model (QPM): An introduction Bank of Canada Review - Autumn 1994 Stephen S. Poloz, David Rose, Robert Tetlow This article provides an overview of the Bank of Canada's new economic model, the Quarterly Projection Model (QPM), which has been under development at the Bank since 1989. The model has two roles. It is used to make economic projections, which are conducted quarterly and form an important basis for discussions of monetary policy between staff and senior management. QPM is also a research tool: it was developed to analyse important changes to the economy or macroeconomic policies which require a deeper understanding of long-term economic forces. The model pays particular attention to factors shaping long-term equilibrium, such as stocks of wealth, capital, government debt and net foreign assets. Various sources of dynamics, including the adjustment of forward-looking expectations, operate to determine the transition path to equilibrium and the consistency of expectations. The article discusses the history of QPM and earlier economic models at the Bank, and provides a simple overview of how the model works. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Economic models
Real Exchange Rate Decompositions Staff Discussion Paper 2022-6 Bruno Feunou, Jean-Sébastien Fontaine, Ingomar Krohn We break down the exchange rate based on an explicit link between fixed income and currency markets. We isolate a foreign exchange risk premium and show it is the main driver of the exchange rate between the Canadian and US dollars, especially on monetary policy and macroeconomic news announcement days. Content Type(s): Staff research, Staff discussion papers Topic(s): Asset pricing, Exchange rates, International financial markets, Monetary policy transmission JEL Code(s): E, E4, E43, F, F3, F31, G, G1, G12
January 19, 2011 Monetary Policy Report – January 2011 This is a report of the Governing Council of the Bank of Canada: Mark Carney, Tiff Macklem, John Murray, Timothy Lane, Jean Boivin and Agathe Côté. It presents the Bank’s outlook based on data received up to 14 January 2011. Content Type(s): Publications, Monetary Policy Report
May 20, 2021 Financial System Review—2021 A stable and efficient financial system is essential for sustaining economic growth and raising living standards. In our Financial System Review, we identify the main vulnerabilities and risks in the financial system in Canada and explain how they have evolved over the past year. Content Type(s): Publications, Financial Stability Report