G01 - Financial Crises - Bank of Canada
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Bank of Canada RSS Feedsen2024-03-29T05:31:19+00:00Mapping out the implications of climate transition risk for the financial system
https://www.bankofcanada.ca/2024/01/mapping-out-the-implications-of-climate-transition-risk-for-the-financial-system/
We develop a new analytical framework to understand the system-wide implications of climate transition risk. When applying this framework to Canadian data, we find that interconnections within the financial sector could amplify the direct effects of climate transition risk on financial entities.2024-01-15T15:00:53+00:00enMapping out the implications of climate transition risk for the financial system2024-01-15Procyclicality in Central Counterparty Margin Models: A Conceptual Tool Kit and the Key Parameters
https://www.bankofcanada.ca/2023/12/staff-discussion-paper-2023-34/
Regulators need to provide effective procyclicality guidance, and central counterparties must design and calibrate their margin systems and procyclicality frameworks appropriately. To serve these needs, we provide a novel conceptual tool kit. Further, we highlight that the focus should be on the key margin system parameters in determining procyclicality.2023-12-29T11:12:20+00:00enProcyclicality in Central Counterparty Margin Models: A Conceptual Tool Kit and the Key Parameters2023-12-29Coronavirus disease (COVID-19)Credit risk managementFinancial institutionsFinancial marketsFinancial stabilityFinancial system regulation and policiesStaff Discussion Paper 2023-34https://www.bankofcanada.ca/wp-content/uploads/2023/12/sdp2023-34.pdfProcyclicality in Central Counterparty Margin Models: A Conceptual Tool Kit and the Key ParametersAlper OdabasiogluDecember 2023GG0G01G2G23G28Understanding the Systemic Implications of Climate Transition Risk: Applying a Framework Using Canadian Financial System Data
https://www.bankofcanada.ca/2023/12/staff-discussion-paper-2023-32/
Our study aims to gain insight on financial stability and climate transition risk. We develop a methodological framework that captures the direct effects of a stressful climate transition shock as well as the indirect—or systemic—implications of these direct effects. We apply this framework using data from the Canadian financial system.2023-12-20T14:44:11+00:00enUnderstanding the Systemic Implications of Climate Transition Risk: Applying a Framework Using Canadian Financial System Data2023-12-20Climate changeEconomic modelsFinancial institutionsFinancial marketsFinancial stabilityStaff Discussion Paper 2023-32https://www.bankofcanada.ca/wp-content/uploads/2023/12/sdp2023-32.pdfUnderstanding the Systemic Implications of Climate Transition Risk: Applying a Framework Using Canadian Financial System DataGabriel BruneauJavier Ojea FerreiroAndrew PlummerMarie-Christine TremblayAidan WittsDecember 2023CC6C63GG0G01G1G10G2G20QQ5Q54A Review of the Bank of Canada’s Support of Key Financial Markets During the COVID-19 Crisis
https://www.bankofcanada.ca/2023/04/staff-discussion-paper-2023-9/
The COVID-19 pandemic placed unprecedented strain on the global financial system. We describe how the Bank of Canada responded to the rapidly deteriorating liquidity in core Canadian fixed-income markets.2023-04-28T08:23:33+00:00enA Review of the Bank of Canada’s Support of Key Financial Markets During the COVID-19 Crisis2023-04-28Coronavirus disease (COVID-19)Financial marketsMarket structure and pricingMonetary policy and uncertaintyStaff Discussion Paper 2023-9https://www.bankofcanada.ca/wp-content/uploads/2023/04/sdp2023-9.pdfA Review of the Bank of Canada’s Support of Key Financial Markets During the COVID-19 CrisisJoshua FernandesMichael MuellerApril 2023EE4E44E5E58GG0G01A Review of the Bank of Canada’s Market Operations Related to COVID-19
https://www.bankofcanada.ca/2023/03/staff-discussion-paper-2023-6/
This paper reviews the range of extraordinary programs launched by the Bank of Canada in response to the pandemic-related financial market disruption. It provides some recommendations for future interventions to ensure the programs are appropriately structured for the financial and economic stresses they are intended to address.2023-03-29T12:30:11+00:00enA Review of the Bank of Canada’s Market Operations Related to COVID-192023-03-29Coronavirus disease (COVID-19)Financial marketsFinancial stabilityStaff Discussion Paper 2023-6https://www.bankofcanada.ca/wp-content/uploads/2023/03/sdp2023-6.pdfStaff Discussion Paper 2023-6Grahame JohnsonMarch 2023DD4D47EE4E41E5GG0G01G1G14G2G21G23HH1H12On the Fragility of DeFi Lending
https://www.bankofcanada.ca/2023/02/staff-working-paper-2023-14/
We develop a dynamic model to capture key features of decentralized finance lending. We identify a price-liquidity feedback: the market outcome in any given period depends on agents' expectations about lending activities in future periods, with higher future price expectations leading to more lending and higher prices in that period.2023-02-22T12:31:21+00:00enOn the Fragility of DeFi Lending2023-02-22Digital currencies and fintechFinancial stabilityStaff Working Paper 2023-14https://www.bankofcanada.ca/wp-content/uploads/2023/02/swp2023-14.pdfOn the Fragility of DeFi LendingJonathan ChiuEmre OzdenorenKathy YuanShengxing ZhangFebruary 2023GG0G01G1G10Settlement Balances Deconstructed
https://www.bankofcanada.ca/2022/06/staff-discussion-paper-2022-13/
Because of the COVID-19 pandemic, public interest in the Bank’s balance sheet and, more specifically, the size of settlement balances, has grown. This paper deconstructs the concept of settlement balances and provides some context on their history, current state and possible future evolution.2022-06-08T11:17:54+00:00enSettlement Balances Deconstructed2022-06-08Central bank researchCoronavirus disease (COVID-19)Financial marketsMonetary policy implementationStaff Discussion Paper 2022-13https://www.bankofcanada.ca/wp-content/uploads/2022/06/sdp2022-13.pdfStaff Discussion Paper 2022-13Parnell ChuGrahame JohnsonScott KinnearKaren McGuinnessMatthew McNeelyJune 2022EE5E58E59E6GG0G01Financial Intermediaries and the Macroeconomy: Evidence from a High-Frequency Identification
https://www.bankofcanada.ca/2022/05/staff-working-paper-2022-24/
We provide empirical evidence of effects to the aggregate economy from surprises about financial intermediaries’ net worth based on a high-frequency identification strategy. We estimate that news of a 1% decline in intermediaries’ net worth leads to a 0.2%–0.4% decrease in the market value of nonfinancial firms.2022-05-20T15:46:50+00:00enFinancial Intermediaries and the Macroeconomy: Evidence from a High-Frequency Identification2022-05-20Asset pricingBusiness fluctuations and cyclesCredit and credit aggregatesFinancial institutionsFinancial marketsFinancial system regulation and policiesMonetary and financial indicatorsStaff Working Paper 2022-24https://www.bankofcanada.ca/wp-content/uploads/2022/05/swp2022-24.pdfStaff Working Paper 2022-24Pablo OttonelloWenting SongMay 2022EE3E32E4E44E5E51GG0G01G1G12G2G21G23G24G3G32Democratic Political Economy of Financial Regulation
https://www.bankofcanada.ca/2021/11/staff-working-paper-2021-59/
We offer a theory of how inefficiently lax financial regulation could arise in a democratic society.2021-11-26T14:17:43+00:00enDemocratic Political Economy of Financial Regulation2021-11-26Financial stabilityFinancial system regulation and policiesHousingInterest ratesStaff Working Paper 2021-59https://www.bankofcanada.ca/wp-content/uploads/2021/11/swp2021-59.pdfStaff Working Paper 2021-59Igor LivshitsYoungmin ParkNovember 2021EE4E43E44GG0G01G2G21G28PP4P48Are Bank Bailouts Welfare Improving?
https://www.bankofcanada.ca/2021/11/staff-working-paper-2021-56/
Financial sector bailouts, while potentially beneficial during a crisis, might lead to excessive risk taking if anticipated. Taking expectations and aggregate risk implications into account, we show that bailouts can be welfare improving, but only if capital adequacy constraints are sufficiently tight.2021-11-09T15:51:59+00:00enAre Bank Bailouts Welfare Improving?2021-11-09Financial institutionsFinancial stabilityFinancial system regulation and policiesStaff Working Paper 2021-56https://www.bankofcanada.ca/wp-content/uploads/2021/11/swp2021-56.pdfStaff Working Paper 2021-56Malik ShukayevAlexander UeberfeldtNovember 2021DD6D62EE3E32E4E44GG0G01