Redemption Runs in Canadian Corporate Bond Funds? Staff analytical note 2018-21 Rohan Arora Mutual funds employ a host of tools to manage redemption run risk. However, our results suggest that Canadian corporate bond funds may be vulnerable to redemption runs, especially when they are less liquid and when market volatility is high. Content Type(s): Staff research, Staff analytical notes JEL Code(s): G, G0, G01, G2, G23 Research Theme(s): Financial system, Financial institutions and intermediation, Financial stability and systemic risk
January 27, 2012 Strengthening Defined-Benefit Pension Plans Financial System Review - December 2005 Jim Armstrong, Jack Selody Content Type(s): Publications, Financial System Review articles
An update on the Canadian money market mutual fund sector Staff analytical note 2025-25 Jabir Sandhu, Sofia Tchamova, Rishi Vala We examine the Canadian money market fund (MMF) sector and find that it has grown rapidly, holding a large share of treasury bills and commercial paper. Unlike in some other jurisdictions where investor outflows likely amplified stresses, Canadian MMFs experienced inflows during the March 2020 market turmoil. Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E4, E40, G, G0, G00, G01, G1, G2, G23 Research Theme(s): Financial markets and funds management, Market functioning, Financial system, Financial institutions and intermediation, Financial stability and systemic risk
Credit Risk Transfer and Bank Insolvency Risk Staff working paper 2017-59 Maarten van Oordt The present paper shows that, everything else equal, some transactions to transfer portfolio credit risk to third-party investors increase the insolvency risk of banks. This is particularly likely if a bank sells the senior tranche and retains a sufficiently large first-loss position. Content Type(s): Staff research, Staff working papers JEL Code(s): G, G2, G21, G28, G3, G32 Research Theme(s): Financial system, Financial institutions and intermediation, Financial stability and systemic risk, Household and business credit
Privacy as a Public Good: A Case for Electronic Cash Staff working paper 2019-24 Rodney J. Garratt, Maarten van Oordt Cash gives users a high level of privacy when making payments, but the use of cash to make payments is declining. People increasingly use debit cards, credit cards or other methods to pay. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, E42, G, G2, G28 Research Theme(s): Money and payments, Cash and bank notes, Digital assets and fintech, Retail payments
Monetary Policy and the Persistent Aggregate Effects of Wealth Redistribution Staff working paper 2021-38 Martin Kuncl, Alexander Ueberfeldt Monetary policy in the presence of nominal debt and labour supply heterogeneity creates a policy trade-off: a short-term economic stimulus leads to persistently reduced output over the medium term. Price-level targeting weakens this trade-off and is better able to stabilize inflation and output than inflation targeting. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E21, E5, E50 Research Theme(s): Financial system, Household and business credit, Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation, Real economy and forecasting
What Drives Episodes of Settlement Fails in the Government of Canada Bond Market? Staff working paper 2017-54 Jean-Sébastien Fontaine, James Pinnington, Adrian Walton We study settlement fails for trades in the Government of Canada bond market. We find that settlement fails do not occur independently. Using a novel and comprehensive dataset, we examine three drivers of fails. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, G, G1, G2, G21, L, L1 Research Theme(s): Financial markets and funds management, Market functioning, Money and payments, Payment and financial market infrastructures
Monetary Policy Governance: Bank of Canada Practices to Support Policy Effectiveness Staff discussion paper 2024-14 Brigitte Desroches, Sharon Kozicki, Laure Simon We examine different monetary policy governance structures and discuss the important roles of non-legislated processes and practices. We also provide an update on monetary policy governance at the Bank of Canada and how it has evolved over time. Content Type(s): Staff research, Staff discussion papers JEL Code(s): E, E0, E02, E5, E58 Research Theme(s): Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation
Identifying Aggregate Shocks with Micro-level Heterogeneity: Financial Shocks and Investment Fluctuation Staff working paper 2020-17 Xing Guo This paper identifies aggregate financial shocks and quantifies their effects on business investment based on an estimated DSGE model with firm-level heterogeneity. On average, financial shocks contribute only 3% of the variation in U.S. public firms’ aggregate investment. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E1, E12, E2, E22, G, G3, G31, G32 Research Theme(s): Financial system, Household and business credit, Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission, Real economy and forecasting
Should Banks Be Worried About Dividend Restrictions? Staff working paper 2023-49 Josef Schroth A regulator would want to restrict dividends to force banks to rebuild capital during a crisis. But such a policy is not time-consistent. A time-consistent policy would let banks gradually rebuild capital and pay dividends even when their equity remains below pre-crisis levels. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E1, E13, E3, E32, E4, E44 Research Theme(s): Financial system, Financial stability and systemic risk, Financial system regulation and oversight