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Payments systems operate virtually unnoticed in our daily lives and yet are crucial to a wellfunctioning economy and financial system.

This paper examines the daily hedging and risk-management practices of financial intermediaries in the Canadian foreign exchange (FX) market.

There is a large body of literature that studies the relationship between financial structure (that is, the degree to which the financial system is either market- or intermediary-based) and long-run economic growth.

The Canadian financial industry continues to experience significant changes. This report provides an update on recent developments and re-examines a number of issues facing financial service providers that were identified in Technical Report No. 82.

This paper clarifies the role and the impact of foreign exchange dealers in the relationship between foreign exchange intervention and nominal exchange rates using a unique dataset that disaggregates trades by dealer and by type of trade.

The magnitude and frequency of recent financial crises underscore the importance of understanding financial instability for the purpose of crisis prevention and crisis management.

This paper investigates the effects of financial market consolidation on risk capital allocation in a financial institution and the implications for market liquidity in dealership markets. We show that an increase in financial market consolidation can have ambiguous effects on liquidity in foreign exchange and government securities markets.

This article outlines the extensive work undertaken by the various participants in Canada's financial sector to ensure "business as usual" heading into January 2000 and beyond. The article looks at preparations in the Bank of Canada's own mission-critical systems and at those of the country's major clearing and settlement systems for which the Bank has oversight responsibility. It also looks at the steps taken by the financial institutions themselves. Contingency planning that takes account of specific year-2000 concerns is also reviewed.

This paper examines the major changes in the Canadian banking system since the Second World War, with special attention paid to the differences between Canadian and U.S. developments over this period.

In this article, the author outlines the recent changes made to the way Canada's bank notes are distributed. The new system allows financial institutions to exchange notes directly with one another at designated points across the country, rather than through Bank of Canada agencies, as was previously the case. The institutions communicate with the Bank of Canada through a computerized inventory-management system. Two Bank of Canada operations centres monitor note quality and supply new notes to the financial institutions. While the Bank continues to maintain firm control over the distribution of Canada's bank notes, the management of information rather than physical notes will improve efficiency and allow significant cost savings to the Bank of Canada and to the government.