Consumer Credit with Over-optimistic Borrowers Staff Working Paper 2020-57 Florian Exler, Igor Livshits, James (Jim) C. MacGee, Michèle Tertilt When lenders cannot directly identify behavioural and rational borrowers, they use type scoring to track the likelihood of a borrower’s type. This leads to the partial pooling of borrowers, which results in rational borrowers subsidizing borrowing costs for behavioural borrowers. This, in turn, reduces the effectiveness of regulatory policies that target mistakes by behavioural borrowers. Content Type(s): Staff research, Staff working papers Research Topic(s): Credit and credit aggregates, Credit risk management, Financial system regulation and policies JEL Code(s): E, E2, E21, E4, E49, G, G1, G18, K, K3, K35
Variance Estimation for Survey-Weighted Data Using Bootstrap Resampling Methods: 2013 Methods-of-Payment Survey Questionnaire Technical Report No. 104 Heng Chen, Rallye Shen Sampling units for the 2013 Methods-of-Payment Survey were selected through an approximate stratified random sampling design. To compensate for non-response and non-coverage, the observations are weighted through a raking procedure. Content Type(s): Staff research, Technical reports Research Topic(s): Econometric and statistical methods JEL Code(s): C, C8, C83
Adoption of a New Payment Method: Theory and Experimental Evidence Staff Working Paper 2017-28 Jasmina Arifovic, John Duffy, Janet Hua Jiang We model the introduction of a new payment method, e.g., e-money, that competes with an existing payment method, e.g., cash. The new payment method involves relatively lower per-transaction costs for both buyers and sellers, but sellers must pay a fixed fee to accept the new payment method. Content Type(s): Staff research, Staff working papers Research Topic(s): Central bank research, Digital currencies and fintech JEL Code(s): C, C3, C35, C8, C83, C9, C92, E, E4, E41
January 11, 2009 Bank of Canada Review - Winter 2008-2009 Cover page Chargex The artefacts on the cover are part of the National Currency Collection of the Bank of Canada. Photography by Gord Carter Content Type(s): Publications, Bank of Canada Review
Reassessing Trade Barriers with Global Value Chains Staff Working Paper 2019-19 Yuko Imura This paper provides a systematic, quantitative analysis of the short-run and long-run effects of various trade-restricting policies in the presence of global value chains and multinational production. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Firm dynamics, International topics, Trade integration JEL Code(s): F, F1, F12, F13, F4, F41
A Market-Based Approach to Reverse Stress Testing the Financial System Staff Working Paper 2025-32 Javier Ojea Ferreiro This article examines what market conditions lead to extreme losses in global financial systems. Using a reverse stress testing approach, it introduces two measures of systemic risk by starting from the tail losses and working backward to identify the events most closely associated with them. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial institutions, Financial stability JEL Code(s): C, C0, C02, C3, C32, C5, C58, G, G2, G21
The Economics of Cryptocurrencies—Bitcoin and Beyond Staff Working Paper 2019-40 Jonathan Chiu, Thorsten Koeppl Since the creation of Bitcoin in 2009, over 2,000 cryptocurrencies have been issued. We evaluate how well a cryptocurrency functions as a payment system. Content Type(s): Staff research, Staff working papers Research Topic(s): Digital currencies and fintech, Monetary policy, Payment clearing and settlement systems JEL Code(s): E, E4, E5, L, L5
The Role of Intermediaries in Selection Markets: Evidence from Mortgage Lending Staff Working Paper 2023-12 Jason Allen, Robert Clark, Jean-François Houde, Shaoteng Li, Anna Trubnikova This paper looks at the role mortgage brokers play in helping borrowers generate quotes and qualify for credit. We find that, on average, borrowers that engage with a mortgage broker pay lower interest rates. However, in about 15% of cases, borrowers are steered towards longer amortizing mortgages than they would have chosen absent a broker. Since mortgages with longer amortization have higher total interest costs over the entire life of the mortgage, this steering is expensive. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial institutions, Financial services, Market structure and pricing JEL Code(s): D, D4, G, G2, G21, L, L2
Human Capital Risk and the Firmsize Wage Premium Staff Working Paper 2008-33 Danny Leung, Alexander Ueberfeldt Why do employed persons in large firms earn more than employed persons in small firms, even after controlling for observable characteristics? Complementary to previous results, this paper proposes a mechanism that gives an answer to this question. Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Labour markets, Productivity JEL Code(s): J, J2, J24, J3, J31
The Bank of Canada's New Quarterly Projection Model, Part 3. The Dynamic Model: QPM Technical Report No. 75 Donald Coletti, Benjamin Hunt, David Rose, Robert Tetlow The Bank of Canada's new Quarterly Projection Model, QPM, combines the short-term dynamic properties necessary to support regular economic projections with the consistent behavioural structure necessary for policy analysis. Content Type(s): Staff research, Technical reports Research Topic(s): Economic models JEL Code(s): C, C5, C53, E, E1, E17