November 23, 2003 An Evaluation of Fixed Announcement Dates Bank of Canada Review - Autumn 2003 Nicolas Parent, Phoebe Munro, Ron Parker When it launched a new system for regularly announcing its decisions regarding the overnight rate of interest in December 2000, the Bank of Canada had a number of key objectives in mind. These included reduced uncertainty in financial markets, greater focus on the Canadian rather than the U.S. economic environment, more emphasis on the medium-term perspective of monetary policy, and increased transparency regarding the Bank's interest rate decisions. Evidence to date suggests that all four objectives have been met to a substantial degree. Fixed announcement dates have provided regular opportunities for the Bank to communicate its views on the state of the Canadian economy to the public. This has helped to improve understanding of the broad direction of monetary policy and of the rationale behind the Bank's policy decisions although the decisions themselves are not always fully anticipated. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Credibility, Financial markets, Interest rates, Monetary policy and uncertainty, Monetary policy implementation
November 23, 2003 Bank of Canada Review - Autumn 2003 Cover page Internment Camp Money Pieces pictured on the cover measure from approximately one to two inches in width. They form part of the National Currency Collection, Bank of Canada. Photographed by Gord Carter, Ottawa. Content Type(s): Publications, Bank of Canada Review
November 22, 2003 Recent Labour Market Developments in Canada Bank of Canada Review - Autumn 2003 Richard Dion, Bill Laur In the year and a half leading up to mid-2003, both employment and labour force participation increased at an unusually rapid pace compared to domestic economic activity. Gains in employment were unusually large, relative to output growth, compared to gains in total hours worked. This is explained by a faster rate of increase in the participation rate of the 55 and older age group, many of whom opted for part-time employment. This shift in the composition of employment contributed to a reduction in the length of the average workweek in 2002. As a result, labour input progressed at a rate that was markedly slower than for employment and more in line with its historical relationship to output growth. The authors anticipate that the 55 and older age group will continue to participate strongly in the labour force, but that as the economy rebounds and uncertainty diminishes, the cyclical component in the growth of part-time work should diminish and that of full-time employment increase. Employment growth should moderate in relation to output growth and there may be a cyclical rebound in labour productivity as total hours worked increases during the initial recovery in output growth. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Labour markets
November 21, 2003 Developments, Issues, and Initiatives in Retail Payments Bank of Canada Review - Autumn 2003 Sean O'Connor Innovations in basic information technologies, in payment applications, and in the availability of global markets, as well as substantial changes in financial sector policy, have fundamentally changed how the retail payments system in Canada operates. Principally, the volume and types of electronic payments have grown, and there is increased participation by diverse groups of financial and non-financial institutions as providers of retail payment services. The resulting policy problem for payment systems is how best to benefit from efficiency gains while managing payment risks. O'Connor examines the effect of the technological and legislative changes and the initiatives developed by the public and private sectors in such areas as the market arrangements for services; customer risks and costs for settling large-value retail payments; the security of payment information and the efficiency with which it is transmitted; and the effects of differing regulatory regimes on competition among providers of retail payment services. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Financial services, Payment clearing and settlement systems
November 20, 2003 Governor Says Low and Predictable Inflation Has Led to Better Labour Market Performance Media Relations St. John's, Newfoundland and Labrador On the 25th anniversary of the end of wage and price controls under the Anti-Inflation Board, Governor David Dodge today explored the effects of low inflation on the performance of Canadian labour markets. Content Type(s): Press, Press releases
November 20, 2003 Technical Note: Elimination of Retroactive Settlement in the ACSS Bank of Canada Review - Autumn 2003 Eric Tuer Effective 1 November 2003, the Bank of Canada abandoned its practice of backdating the results of settlement of payments through the Automated Clearing Settlement System (ACSS). It has adopted instead a system of "next-day" settlement under which the results of the settlement process will appear on the central bank's books on the day the items actually settle in the ACSS. Since July 1986, settlement of these items had occurred at noon the day after items were presented for clearing, but the results were recognized on the Bank's books the previous day, through backdating, or "retroactive" settlement. The new system should simplify the payments process and improve the reporting of settlement risk, as well as promote cost-effectiveness within the payments systems. ACSS participants have agreed among themselves to implement an interest-compensation mechanism in order to avoid imposing a float charge on their customer base. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Payment clearing and settlement systems
November 20, 2003 Low and Predictable Inflation and the Performance of Canadian Labour Markets Lecture David Dodge Memorial University of Newfoundland St. John's, Newfoundland and Labrador The goal of Canadian monetary policy is to contribute to solid economic performance and rising living standards. The best way we can do this is by keeping inflation low, stable, and predictable. This has important implications for labour market performance. Content Type(s): Press, Speeches and appearances, Lectures
November 17, 2003 Global Challenges, Canadian Opportunities Remarks David Dodge Office for Partnerships for Advanced Skills Annual Visionary Seminar Ottawa, Ontario It is certainly nothing new to say that economies have become increasingly globalized. In his 1962 book, The Gutenberg Galaxy, Marshall McLuhan observed that the electronic mass media were collapsing time and space barriers. This enabled people to communicate on a global scale. He coined the term "global village" to describe this change. Content Type(s): Press, Speeches and appearances, Remarks
November 3, 2003 On Economic Education Remarks David Dodge David Dodge Tribute Dinner hosted by the Canadian Foundation of Economic Education Toronto, Ontario The program this evening focuses on the value of public service and the importance of economic and financial literacy for the well-being of Canadians. These two themes have special significance for me, as my career has involved time spent in the public service as well as teaching. Content Type(s): Press, Speeches and appearances, Remarks
November 3, 2003 Bank of Canada announces the elimination of retroactive settlement in the ACSS The Bank of Canada announced that, effective 1 November 2003, it will no longer backdate the results of payments settling through the Automated Clearing Settlement System (ACSS), an accounting practice that has been in place since July 1986. Content Type(s): Press, Market notices