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It's not surprising that the Bank of Canada is interested in promoting economic integrity. After all, the Bank of Canada Act mandates us, as far as possible within the scope of monetary policy action, to "promote the economic and financial welfare of Canada."

The Bank of Canada welcomes the initiatives announced today to support the asset-backed commercial paper market in Canada.

We assess how much the recent rate-hike cycle has and will affect mortgage borrowers' consumption through its impacts on mortgage payments. Our analysis provides insights into the effects of changes in monetary policy on the consumption of mortgage borrowers.

Non-bank financing provides an important funding source for the economy and is a valuable alternative to traditional banking. It helps enhance the efficiency and resiliency of the financial system while giving customers more choices for their financial services. Unlike banking, it is not prudentially regulated.

The Bank of Canada’s Communications Department has developed a framework to quantify and qualify the Bank’s communications efforts and their results. Using data-based measurement and evaluation, the department can assess the impact of the Bank’s communications activities and gauge the department’s contribution to the Bank’s overall goals.

The investment of foreign exchange reserves or other asset portfolios requires an assessment of the credit quality of counterparties. Traditionally, foreign exchange reserve managers and other investors have relied on credit rating agencies (CRAs) as the main source for credit assessments.

The Bank of Canada recently developed an asset-liability-matching model to aid in the management of Canada’s foreign exchange reserves. The model allows policy-makers at the Bank and the Department of Finance to analyze asset-allocation and funding-mix decisions by quantifying both the risk-return and liquidity trade-offs for the assets, as well as the risk-cost trade-offs of the funding liabilities.

Several recent papers have presented evidence from foreign exchange and other markets suggesting that the log of excess returns can be characterized as first-order integrated processes (I(1)). This contrasts sharply with the "conventional" wisdom that log prices are integrated of order one I(1) and that log returns should therefore be integrated of order zero I(0), and even more sharply with the view that past returns have no ability to predict future returns (weak market efficiency).

This article summarizes the proceedings of a conference hosted by the Bank of Canada in November 1999. Three major themes emerged at the conference. The first concerned uncertainty about the transmission mechanism by which monetary policy affects output and inflation. The second concerned the potential usefulness of monetary aggregates in guiding the economy along a stable non-inflationary growth path. The third was the recent developments in dynamic monetary general-equilibrium models. The work presented suggests that a wide range of models is useful for understanding the various paths by which monetary policy actions might influence the economy.

Significant legislative developments have occurred in Canada's financial services sector over the past decade. This article chronicles those developments and gives an overview of the key provisions contained in Bill C–8, the legislation to reform the sector that came into force in October 2001. The article briefly describes some of the restructuring trends in the financial services sector since the early 1990s and the legislative changes that affected federal financial institutions over the period 1992–2001, as well as the process leading up to the 2001 legislation and some of its key provisions. The 2001 financial sector legislation was wide-ranging. It maintained the principle of wide ownership of large banks and introduced a number of changes, including a holding company option that can give greater organizational flexibility to banks and life insurance companies; the creation of the Financial Consumer Agency of Canada to enforce consumer-related provisions as they relate to federal financial institutions; and changes to the Canadian Payments Association and the access to and governance of the payments system.