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9269 Results

November 29, 2022

Accessibility

The Bank’s Accessibility Plan shares how we strive to be accessible to everyone. Let us know how we’re doing—share your feedback online, by telephone, by email, or by mail.

Regulatory Requirements of Banks and Arbitrage in the Post-Crisis Federal Funds Market

Staff Working Paper 2022-48 Rodney J. Garratt, Sofia Priazhkina
This paper explains the nature of interest rates in the U.S. federal funds market after the 2007-09 financial crisis. We build a model of the over-the-counter lending market that incorporates new aspects of the financial system: abundance of liquidity, different regulatory standards for banks, and arbitrage opportunities created by limited access to the facility granting interest on excess reserves.

Laura Zhao

Laura Zhao is currently a senior economist in the Financial Stability Department at the Bank of Canada.

Stablecoins and Their Risks to Financial Stability

Staff Discussion Paper 2022-20 Cameron MacDonald, Laura Zhao
What risks could stablecoins pose to the financial system? We argue that the stabilization mechanisms of stablecoins give rise to the risk of confidence runs, which can propagate to broader cryptoasset markets and the traditional financial sector. We also argue that stablecoins can contribute to financial stability risks by facilitating the buildup of leverage and liquidity mismatch in decentralized finance. Such risks cannot be addressed by ensuring the price stability of stablecoins alone. Finally, we explore the potential implications of stablecoins for the current system of bank-intermediated credit and for monetary policy.
November 28, 2022

Canadian Financial Sector Resiliency Group

Canadian Financial Sector Resiliency Group (CFRG) is a public-private partnership led by the Bank of Canada that is designed to strengthen the financial sector’s critical infrastructure against risks to business operations, including cyber incidents. Find out about our mandate, membership, or contact us.
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