Elizabeth Woodman

Principal Researcher

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Elizabeth Woodman

Principal Researcher
Financial Stability
Resolution and Crisis Preparedness

Bank of Canada
234 Wellington Street
Ottawa, ON, K1A 0G9

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Liquidity and Central Clearing: Evidence from the CDS Market

Staff Working Paper 2012-38 Joshua Slive, Jonathan Witmer, Elizabeth Woodman
An international initiative to increase the use of central clearing for OTC derivatives emerged as one of the reactions to the 2008 financial crisis. The move to central clearing is a fundamental change in the structure of the market.
Content Type(s): Staff Research, Staff Working Papers Topic(s): Financial markets JEL Code(s): G, G3, G30, G38

June 18, 2005 Recent Trends in Canadian Defined-Benefit Pension Sector Investment and Risk Management

Defined-benefit (DB) pension plans account for the majority of employer pension fund assets. In recent years, a number of DB plans have become underfunded, in sharp contrast to the 1990s, when many plans had large actuarial surpluses. The deterioration in the financial health of DB plans has underscored various longer-term structural issues that could make it increasingly difficult for plan sponsors to manage the financial risks of these plans. Tuer and Woodman examine how funding deficits, a greater focus on plan liabilities, a low yield environment, and changing investment beliefs are influencing investment decisions in the Canadian DB pension sector. They review the funding of DB plans, changing views on the equity-risk premium, and the shift towards liability-centred approaches to investment and how these developments are affecting pension sector investment. They also consider additional influences on the pension sector, including the limited supply of long-term bonds, the elimination of the foreign-property rule, and the movement towards fair-value accounting and a financial-economics approach to actuarial valuation, as well as their implications for financial markets.

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