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308 Results

The impact of trading flows on Government of Canada bond prices

Staff Analytical Note 2025-20 Andreas Uthemann, Rishi Vala, Jun Yang
Trading flows affect Government of Canada bond prices. Our estimates suggest a sale of 1% of the available supply of bonds typically lowers bond prices by 0.2%. From 2000 to 2025, demand from institutional investors, such as Canadian pension funds and foreign investors, explains 69% of quarterly price variation, with the remainder explained by changes in the supply of bonds.

Non-bank financial intermediation: Canada’s submission to the 2024 global monitoring report

Staff Analytical Note 2025-19 Elba Gomez Navas Acevedo, Thomas Thorn
We share insights about non-bank financial intermediation in Canada in 2023. These data were collected as part of the Bank of Canada’s contribution to the Financial Stability Board’s Global Monitoring Report on Non-Bank Financial Intermediation.
Content Type(s): Staff research, Staff analytical notes Research Topic(s): Financial institutions, Sectoral balance sheet JEL Code(s): G, G2, G21, G22, G23

The Optimum Quantity of Central Bank Reserves

Staff Working Paper 2025-15 Jonathan Witmer
This paper analyzes the optimal quantity of central bank reserves in an economy where reserves and other financial assets provide liquidity benefits. Using a static model, I derive a constrained Friedman rule that characterizes the socially optimal level of reserves, demonstrating that this quantity is neither necessarily large nor small but depends on the marginal benefits of reserves relative to alternative safe assets.

Are Hedge Funds a Hedge for Increasing Government Debt Issuance?

Staff Discussion Paper 2025-7 Adam Epp, Jeffrey Gao
This paper studies the rapid increase since 2019 of Government of Canada (GoC) debt issuance alongside greater hedge fund participation at GoC bond auctions. We find a systematic relationship between GoC debt stock and hedge fund bidding shares at auction.
March 17, 2025

Will asset managers dash for cash? A summary of the implications for central banks

We consider ways central banks could adapt in the event of an increased risk of a dash for cash from asset managers. We explore ideas such as new facilities that ease asset managers’ ability to convert existing assets to cash or new assets with liquidity that central banks would guarantee.

Will Asset Managers Dash for Cash? Implications for Central Banks

We consider ways central banks could adapt in the event of an increased risk of a dash for cash from asset managers. We explore ideas such as new facilities that ease asset managers’ ability to convert existing assets to cash or new assets with liquidity that central banks would guarantee.

Stress testing central counterparties for resolution planning

The Bank of Canada completed its first resolution plan for the Canadian Derivatives and Clearing Corporation (CDCC) in 2024. To estimate the resolution costs, we apply the extreme value theory method to simulate the credit losses that would result from extreme scenarios where multiple clearing members default at the same time.

The Prudential Toolkit with Shadow Banking

Staff Working Paper 2025-9 Kinda Hachem, Martin Kuncl
Can regulators keep pace with banks’ creative regulatory workarounds? Our analysis unpacks the trade-offs between fixed regulations and crisis-triggered rules, showing that the latter are especially prone to circumvention—and can trigger larger, costlier bailouts.

Crisis facilities as a source of public information

Staff Analytical Note 2025-7 Lerby Ergun
During the COVID-19 financial market crisis, central banks introduced programs to support liquidity in important core funding markets. As well as acting as a backstop to market prices, these programs produce useful trading data on prevailing market conditions. When summary information from this data is shared publicly, it can help market participants understand current conditions and aid the recovery of market functioning.
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