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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.

By All Accounts is the fifth and final book in the Bank's souvenir history series. This volume presents a portrait of the Bank from the perspective of outside observers, showing how Canadians have perceived the performance of their central bank over the decades through the eyes of those who monitor its work on the public's behalf.

2013 proved to be a challenging year for the Bank of Canada. Inflation continued to drift below target, and the economy failed to move onto a more sustainable track. The 2013 Annual Report highlights key achievements over the year, describes the Bank’s corporate governance, and presents the financial statements in conjunction with Management’s Discussion and Analysis.

This paper estimates potential exposures, netting benefits and settlement gains by merging retail and wholesale payments into batches and conducting multiple intraday settlements in this hypothetical model of a single "calibrated payments system." The results demonstrate that credit risk exposures faced by participants in the system are largely dependent on their relative activity in the retail and wholesale payments systems.

Canada’s labour market is tight but beginning to ease. Unemployment will likely rise in turn, but the economy can avoid a recessionary surge given current conditions. Higher unemployment would nonetheless be material, especially for those directly impacted.

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.

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).

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.

We document recent changes in Canadian immigration, marked by an increasing prevalence of temporary residency. Using microdata from Statistics Canada's Labour Force Survey, we show that temporary workers' characteristics and nominal wages have diverged from those of Canadian-born workers.

This paper studies the implications of certain kinds of uncertainty for monetary policy. It first describes the optimum policy rule in a simple model of the transmission mechanism as in Ball and Svensson.