The Effect of Mortgage Rate Resets on Debt: Evidence from TransUnion (Part I) Staff Analytical Note 2020-2 Katya Kartashova This note studies how decreases in mortgage rates affect the behaviour of borrowers in terms of spending on durable goods and repaying debt. Content Type(s): Staff research, Staff analytical notes Topic(s): Credit and credit aggregates, Housing, Interest rates, Monetary policy, Monetary policy transmission JEL Code(s): D, D1, D12, D14, E, E4, E43, E5, E52, G, G2, G21, R, R3, R31
Lending Standards, Productivity and Credit Crunches Staff Working Paper 2019-25 Jonathan Swarbrick We propose a macroeconomic model in which adverse selection in investment drives the amplification of macroeconomic fluctuations, in line with prominent roles played by the credit crunch and collapse of the asset-backed security market in the financial crisis. Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Credit and credit aggregates, Financial markets, Financial stability, Interest rates, Productivity JEL Code(s): E, E2, E22, E3, E32, E4, E44, G, G0, G01
May 16, 2019 Release of the Financial System Review Opening statement Stephen S. Poloz Ottawa, Ontario Press conference following the release of the Financial System Review. Content Type(s): Press, Speeches and appearances, Opening statements Topic(s): Climate change, Credit and credit aggregates, Financial stability, Financial system regulation and policies, Housing, Regional economic developments, Sectoral balance sheet
Measuring Non-Financial Corporate Sector Vulnerabilities in Canada Staff Analytical Note 2019-15 Timothy Grieder, Claire Schaffter The ratio of non-financial corporate debt to gross domestic product in Canada has increased noticeably in recent years and is currently at an all-time high. In light of this development, we use a unique firm-level dataset to construct vulnerability indicators for the non-financial corporate sector in Canada. Content Type(s): Staff research, Staff analytical notes Topic(s): Business fluctuations and cycles, Credit and credit aggregates, Financial stability, Monetary and financial indicators, Recent economic and financial developments, Sectoral balance sheet JEL Code(s): G, G0, G01, G3, G32
Reassessing the Growth of HELOCs in Canada Using New Regulatory Data Staff Analytical Note 2019-14 Leila Al-Mqbali, Olga Bilyk, Stefan Caputo, James Younker Using new regulatory data on residential secured lending from Canadian banks, we assess the growth rate of home equity lines of credit (HELOCs). Content Type(s): Staff research, Staff analytical notes Topic(s): Credit and credit aggregates, Financial institutions, Financial stability, Recent economic and financial developments JEL Code(s): D, D1, G, G2, G21, G28
Macroprudential Policy with Capital Buffers Staff Working Paper 2019-8 Josef Schroth The countercyclical capital buffer is part of Basel III, the set of regulatory measures developed in response to the financial crisis of 2007–09. This study focuses on how time-varying capital buffers can address inefficiencies in economies with endogenous financial crises. Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Credit and credit aggregates, Credit risk management, Financial stability, Financial system regulation and policies, Lender of last resort JEL Code(s): E, E1, E13, E3, E32, E4, E44
The Impact of Recent Policy Changes on the Canadian Mortgage Market Staff Analytical Note 2018-35 Olga Bilyk, Maria teNyenhuis Recent policy changes are having a clear impact on the mortgage market. The number of new, highly indebted borrowers has fallen, and overall mortgage activity has slowed significantly. Content Type(s): Staff research, Staff analytical notes Topic(s): Credit and credit aggregates, Financial institutions, Interest rates, Recent economic and financial developments JEL Code(s): D, D1, E, E4, G, G2, G21, G28
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 Topic(s): Credit and credit aggregates, Fiscal policy, International topics JEL Code(s): E, E4, E44, E6, E62
June 7, 2018 Release of the Financial System Review Opening statement Stephen S. Poloz, Carolyn A. Wilkins Ottawa, Ontario Press conference following the release of the Financial System Review. Content Type(s): Press, Speeches and appearances, Opening statements Topic(s): Credit and credit aggregates, Financial stability, Financial system regulation and policies, Housing, Regional economic developments, Sectoral balance sheet
Interest Rate and Renewal Risk for Mortgages Staff Analytical Note 2018-18 Olga Bilyk, Cameron MacDonald, Brian Peterson In this note, we explore two types of risk faced by holders of mortgages and home equity lines of credit (HELOCs) in the context of rising interest rates: interest rate risk and renewal risk. Content Type(s): Staff research, Staff analytical notes Topic(s): Credit and credit aggregates, Financial institutions, Interest rates, Recent economic and financial developments JEL Code(s): D, D1, E, E4, E5, G, G2, G21, G28