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2126 Results

Price Caps in Canadian Bond Borrowing Markets

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.

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.

Estimating the Costs of Electronic Retail Payment Networks: A Cross-Country Meta Analysis

Staff discussion paper 2025-17 Cam Donohoe, Youming Liu
We explore how many electronic funds transfer (EFT) systems can viably coexist within a jurisdiction at efficient scale by estimating the cost curve of the average EFT. We estimate the marginal cost to be approximately $0.55 per transaction, and the fixed cost to be approximately $83 million per year.

Are Hedge Funds a Hedge for Increasing Government Debt Issuance?

Staff discussion paper 2025-7 Adam Epp, Jeffrey Gao
This paper studies the rapid increase since 2019 of Government of Canada (GoC) debt issuance alongside greater hedge fund participation at GoC bond auctions. We find a systematic relationship between GoC debt stock and hedge fund bidding shares at auction.
September 11, 2009

Bank of Canada Review - Autumn 2009

Autumn 2009
Bank of Canada liquidity actions in response to the financial market turmoil; understanding corporate bond spreads using credit default swaps; review of the conflicts of interest between participants in the securitization process highlighting the most recent policy measures and potential solutions for ameliorating these agency issues.
August 18, 2011

Developing a Medium-Term Debt-Management Strategy for the Government of Canada

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.
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