January 24, 2012 Stress Testing the Corporate Loans Portfolio of the Canadian Banking Sector Financial System Review - June 2007 Miroslav Misina, David Tessier, Shubhasis Dey Content Type(s): Publications, Financial System Review articles
March 14, 2019 The Age of Leverage Remarks Carolyn A. Wilkins UBC Vancouver School of Economics and CFA Society Vancouver Vancouver, British Columbia Senior Deputy Governor Carolyn A. Wilkins discusses how high leverage is both a headwind to global growth and a vulnerability in the global financial system. Content Type(s): Press, Speeches and appearances, Remarks Subject(s): Financial system, Financial stability, Monetary policy, Economic models, Economy/Economic growth, Inflation
Non-Performing Loans, Fiscal Costs and Credit Expansion in China Staff working paper 2018-53 Huixin Bi, Yongquan Cao, Wei Dong This paper studies how the credit expansion policy pursued by the Chinese government in an effort to stimulate its economy in the post-crisis period affects bank–firm loan contracts and the macroeconomy. We build a structural model with financial frictions in which the optimal loan contract reflects the trade-off between leverage and the probability of default. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, E44, E6, E62 Research Theme(s): Financial system, Financial institutions and intermediation, Household and business credit, Models and tools, Economic models, Monetary policy, Real economy and forecasting
Unregulated Lending, Mortgage Regulations and Monetary Policy Staff working paper 2022-28 Ugochi Emenogu, Brian Peterson This paper evaluates the effectiveness of macroprudential policies when regulations are uneven across mortgage lender types. We look at credit tightening that results from macroprudential regulations and examine how much of it is counteracted by credit shifting to unregulated lenders. We also study the impact of monetary policy tightening when some lenders are unregulated. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, E44, E5, E50, E52, E58, G, G2, G21, G23, G28 Research Theme(s): Financial system, Financial institutions and intermediation, Financial system regulation and oversight, Household and business credit
March 12, 2012 Promoting Growth, Mitigating Cycles and Inequality: The Role of Price and Financial Stability Remarks Tiff Macklem Brazil-Canada Chamber of Commerce São Paulo, Brazil Senior Deputy Governor Tiff Macklem discusses how price and financial stability help promote growth and mitigate economic cycles and inequality. Content Type(s): Press, Speeches and appearances, Remarks
On the Fragility of DeFi Lending Staff working paper 2023-14 Jonathan Chiu, Emre Ozdenoren, Kathy Yuan, Shengxing Zhang We develop a dynamic model to capture key features of decentralized finance lending. We identify a price-liquidity feedback: the market outcome in any given period depends on agents' expectations about lending activities in future periods, with higher future price expectations leading to more lending and higher prices in that period. Content Type(s): Staff research, Staff working papers JEL Code(s): G, G0, G01, G1, G10 Research Theme(s): Financial system, Financial stability and systemic risk, Money and payments, Digital assets and fintech
The Effect of Oil Price Shocks on Asset Markets: Evidence from Oil Inventory News Staff working paper 2020-8 Ron Alquist, Reinhard Ellwanger, Jianjian Jin We quantify the reaction of U.S. equity, bond futures, and exchange rate returns to oil price shocks driven by oil inventory news. Content Type(s): Staff research, Staff working papers JEL Code(s): D, D8, D83, E, E4, E44, G, G1, G14, G15, Q, Q4, Q41, Q43 Research Theme(s): Financial markets and funds management, International markets and currencies, Market functioning, Monetary policy, Inflation dynamics and pressures
The Rise of Non-Regulated Financial Intermediaries in the Housing Sector and its Macroeconomic Implications Staff working paper 2017-36 Hélène Desgagnés I examine the impact of non-regulated lenders in the mortgage market using a dynamic stochastic general equilibrium (DSGE) model. My model features two types of financial intermediaries that differ in three ways: (i) only regulated intermediaries face a capital requirement, (ii) non-regulated intermediaries finance themselves by selling securities and cannot accept deposits, and (iii) non-regulated intermediaries face a more elastic demand. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E3, E32, E4, E44, E47, E6, E60, G, G2, G21, G23, G28 Research Theme(s): Financial system, Financial institutions and intermediation, Financial stability and systemic risk, Household and business credit, Models and tools, Economic models
May 14, 2015 The Use of Cash in Canada Bank of Canada Review - Spring 2015 Ben Fung, Kim Huynh, Gerald Stuber The Bank of Canada’s 2013 Methods-of-Payment Survey indicates that the share of cash in the overall number of retail transactions has continued to decrease, mainly because of increased use of contactless credit cards. The share of cash in the total value of retail transactions was virtually unchanged from 2009 to 2013. In particular, the value share of cash transactions above $50 increased. Automated banking machines (ABMs), still the major source of cash for Canadians, were used less often in 2013 than in 2009. Cash use in Canada is broadly similar to that in Australia and the United States. Content Type(s): Publications, Bank of Canada Review articles JEL Code(s): C, C8, C83, E, E4, E42, G, G2, G21, L, L8, L81
May 5, 2015 Liquid Markets for a Solid Economy Remarks Carolyn A. Wilkins Chambre de commerce du Montréal métropolitain Montréal, Quebec Senior Deputy Governor Wilkins discusses funding and market liquidity, and announces consultations on the Bank’s market operations and emergency lending frameworks. Content Type(s): Press, Speeches and appearances, Remarks