CBDC and Monetary Sovereignty Staff analytical note 2020-5 Antonio Diez de los Rios, Yu Zhu In an increasingly digitalized world, issuers of private digital currency can weaken central banks’ ability to stabilize the economy. By continuing to make central bank money attractive as a payment instrument in a digital world, a central bank digital currency (CDBC) could help to maintain a country’s monetary sovereignty. Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E5, E52, E58, F, F5, F55, G, G1, G15 Research Theme(s): Financial system, Financial stability and systemic risk, Monetary policy, Monetary policy tools and implementation, Money and payments, Digital assets and fintech, Payment and financial market infrastructures
Assessment of the Effects of Macroprudential Tightening in Canada Staff analytical note 2016-12 Martin Kuncl During the period of 2008 to 2012, the rules for government-backed mortgage insurance were tightened on four occasions. In this note, we estimate the effects through a simple econometric exercise using a vector error-correction model (VECM). Content Type(s): Staff research, Staff analytical notes JEL Code(s): C, C3, C32, E, E6, E65, G, G2, G28 Research Theme(s): Financial system, Financial system regulation and oversight, Household and business credit
August 18, 2011 Developing a Medium-Term Debt-Management Strategy for the Government of Canada Bank of Canada Review - Summer 2011 Marc Larson, Étienne Lessard As the Government of Canada’s fiscal agent, the Bank of Canada provides strategic policy advice on the management of the government’s debt, in addition to being responsible for conducting debt-management operations. In this article, the authors review the evolution of the debt strategy over the past 20 years and outline the complex process of developing a sound strategy that balances various cost and risk considerations. This includes an examination of the tools and practices used to develop the new medium-term debt-management strategy, such as the modelling approach involved, market consultations and various debt-management metrics. Content Type(s): Publications, Bank of Canada Review articles
January 14, 2008 Backgrounder on Questions in the Business Outlook Survey Concerning Past Sales and Credit Conditions Starting with the winter 2007–08 survey, the results of two additional questions became included in the Business Outlook Survey (BOS) publication: the balance of opinion on past sales and the balance of opinion on credit conditions. This backgrounder briefly describes the two questions and presents the correlations between the responses and relevant economic data. Content Type(s): Background materials
May 16, 2016 The Micro and Macro of Downward Nominal Wage Rigidity Bank of Canada Review - Spring 2016 Robert Amano, Dany Brouillette, Stefano Gnocchi, Natalia Kyui The article examines the extent of downward nominal wage rigidity in Canada and its implications for monetary policy. The authors ask whether its existence is a sufficient argument for a higher inflation target if concerns about the effective lower bound are adequately addressed. Content Type(s): Publications, Bank of Canada Review articles JEL Code(s): E, E3, E4, E5, J, J2, J23, J3, J30
Firm Dynamics and Multifactor Productivity: An Empirical Exploration Staff working paper 2018-15 Pierre St-Amant, David Tessier There are indications that business dynamism has declined in advanced economies. In particular, firm entry and exit rates have fallen, suggesting that the creative destruction process has lost some of its vitality. Meanwhile, productivity growth has slowed. Some believe that lower entry and exit rates partly explain the weaker productivity growth. Content Type(s): Staff research, Staff working papers JEL Code(s): D, D2, D24, M, M1, M13, O, O4, O47 Research Theme(s): Monetary policy, Real economy and forecasting, Structural challenges, Digitalization and productivity
October 26, 2010 Reform of Over-the-Counter (OTC) Derivatives Markets in Canada: Discussion Paper from the Canadian OTC Derivatives Working Group Today, the Canadian OTC Derivatives Working Group published a paper that sets out preliminary recommendations for implementing Canada's G-20 commitments related to OTC derivatives. Content Type(s): Press, Market notices
August 25, 2009 The Canadian Economy Beyond the Recession Remarks Timothy Lane Canadian Association for Business Economics Kingston, Ontario The theme of the conference, "managing the recovery," is particularly timely: As we move past the gravest dangers of the financial crisis toward better days, attention has turned to the policy challenges posed by the recovery. Content Type(s): Press, Speeches and appearances, Remarks
Central Bank Liquidity Facilities and Market Making Staff working paper 2022-9 David Cimon, Adrian Walton We create a theoretical model of central bank asset purchases. The model helps explain how, in a crisis, these purchases ease pressures on investment dealers. Content Type(s): Staff research, Staff working papers JEL Code(s): G, G1, G10, G2, G20, L, L1, L10 Research Theme(s): Financial markets and funds management, Market functioning, Financial system, Financial institutions and intermediation, Financial stability and systemic risk, Monetary policy, Monetary policy tools and implementation
Price Caps in Canadian Bond Borrowing Markets Staff analytical note 2019-2 Léanne Berger-Soucy, Jean-Sébastien Fontaine, Adrian Walton Price controls, or caps, can lead to shortages, as 1970’s gasoline price controls illustrate. One million trades show that the market for borrowing bonds in Canada has an implicit price cap: traders are willing to pay no more than the overnight interest rate to borrow a bond. This suggests the probability of a shortage increases when interest rates are very low. Content Type(s): Staff research, Staff analytical notes JEL Code(s): G, G1, G10, G12 Research Theme(s): Financial markets and funds management, Market functioning, Market structure