The Syndicated Loan Market: Developments in the North American Context Staff Working Paper 2003-15 Jim Armstrong The author describes the rapid development of the syndicated corporate loan market in the 1990s. He explores the historical forces that led to the development of the contemporary U.S. syndicated loan market, which is effectively a hybrid of the investment banking and commercial banking worlds. Content Type(s): Staff research, Staff working papers Topic(s): Financial institutions, Financial markets JEL Code(s): G, G1, G10, G2, G21
An Index of Financial Stress for Canada Staff Working Paper 2003-14 Mark Illing, Ying Liu The authors develop an index of financial stress for the Canadian financial system. Stress is defined as the force exerted on economic agents by uncertainty and changing expectations of loss in financial markets and institutions. Content Type(s): Staff research, Staff working papers Topic(s): Financial institutions, Financial markets JEL Code(s): E, E5, G, G1, G10
May 23, 2003 The Bank of Canada: Moving Towards Transparency Bank of Canada Review - Spring 2003 John Chant During the 1990s the Bank of Canada made several changes that transformed its conduct of monetary policy. In the 1960s and 1970s, policy decisions were made in an environment characterized by instrument opaqueness and goal opaqueness, which tended to shield the Bank's operations from scrutiny and accountability. Since the 1970s the Bank has moved towards transparency and openness by rejecting multiple policy instruments and adopting a single, well-defined goal of inflation control. A recent survey has shown that the Bank of Canada is in the middle range of central banks with regard to its transparency and has lost points for not publishing the forecasts that shape its policy or the minutes and voting records of its governing body. Chant suggests that the public has benefited significantly from the changes the Bank has made, but that it should continue to support research on the benefits of low and stable inflation and continually inform other policy-makers and the public of the results. Content Type(s): Publications, Bank of Canada Review articles
May 22, 2003 Bank of Canada Review - Spring 2003 Cover page Seventeenth-Century English Tradesmen's Tokens The tokens pictured on the cover are part of the National Currency Collection. Photographed by Gord Carter, Ottawa. Content Type(s): Publications, Bank of Canada Review
May 22, 2003 Inflation Targeting and Medium-Term Planning: Some Simple Rules of Thumb Bank of Canada Review - Spring 2003 David Longworth Inflation targeting, a stable macroeconomic environment, and an average growth rate for potential output that is not expected to vary much in the next several years all help households, businesses, and governments in their medium-term economic and financial planning. Several simple rules of thumb can be usefully employed in this planning. Specifically, inflation targeting has maintained most major measures of inflation quite close to the target midpoint on average over a number of years. Combined with a clear fiscal framework, this has contributed to a more stable macroeconomic environment in which output varies less around its potential level. Potential output growth is expected to average around 3 per cent over the next several years. In light of these factors and historical relationships, labour income, profits, and consumer spending will likely grow, on average, by about 5 per cent over the medium term. Real and nominal long-term interest rates should also continue to be stable, with real 30-year yields varying around 3.5 or 4.0 per cent, and nominal yields varying around 5.5 or 6.0 per cent. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Business fluctuations and cycles, Inflation targets, Inflation: costs and benefits
May 21, 2003 Conference Summary: Price Adjustment and Monetary Policy Bank of Canada Review - Spring 2003 Robert Amano, Donald Coletti The 2002 Bank of Canada Conference focused on price adjustment, a critically important issue for monetary policy. Given the acceptance throughout the 1990s and 2000s of the existence of price stickiness in goods or labour markets, or both, and of the important role that monetary policy can play in an economy, the time was right for a conference that would focus on current developments in this area of research, particularly within a Canadian context. Conference papers covering both theoretical and empirical studies explored such themes as sources of the persistence of inflation, forward-looking models of inflation, models of inflation in open economies, the macroeconomic effects of technology shocks, and models of the interaction between wages, prices, and real economic outcomes. Content Type(s): Publications, Bank of Canada Review articles
May 20, 2003 Updating the Bank of Canada Commodity Price Index Bank of Canada Review - Spring 2003 Todd Hirsch The Bank of Canada Commodity Price Index (BCPI) summarizes the price movements of 23 commodities produced in Canada. Information provided by the BCPI is used in analyzing movements in GDP, industrial producer prices, inflation, and the exchange rate. Effective 15 May 2003, a number of changes will be reflected in the BCPI. To ensure that the index accurately reflects the natural resource sectors of the economy, a number of new components and pricing sources have been incorporated into the BCPI. Weights in the new index will be chained to 1 January 1991 and 1 January 2000 to better reflect contemporary values. Content Type(s): Publications, Bank of Canada Review articles
May 13, 2003 Policies to Sustain Growth Domestically and Internationally Remarks David Dodge Foreign Bankers' Association in the Netherlands Amsterdam, The Netherlands I have been looking forward to coming to Amsterdam since Governor Wellink extended the invitation last year. I must say that when you consider what has been happening in the world economy, it is certainly an interesting time to be a Canadian at international meetings such as the BIS meeting I attended yesterday. Content Type(s): Press, Speeches and appearances, Remarks
Un modèle « PAC » d'analyse et de prévision des dépenses des ménages américains Staff Working Paper 2003-13 Marc-André Gosselin, René Lalonde Traditional structural models cannot distinguish whether changes in activity are a function of altered expectations today or lagged responses to past plans. Polynomial-adjustment-cost (PAC) models remove this ambiguity by explicitly separating observed dynamic behaviour into movements that have been induced by changes in expectations, and responses to expectations, that have been delayed because of adjustment costs. Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Econometric and statistical methods, Economic models JEL Code(s): C, C3, C32, E, E2, E21, E3, E32
May 1, 2003 Changes to the Bank of Canada Commodity Price Index (BCPI) Effective 15 May 2003 the following changes will be made to the Bank of Canada Commodity Price Index (BCPI). Content Type(s): Press, Announcements