James Chapman

Assistant Chief

James Chapman is the Assistant Chief of the Financial Studies Division in the Financial Stability Department at the Bank of Canada. James received a Ph.D. in economics and a MSc in statistics from the University of Iowa in 2006 and joined the Bank of Canada as a senior analyst in that year. James’s primary research focus has been on payment and settlement related issues such as liquidity risk and credit risk in large-value payment systems and interbank markets. He has also recently become increasingly involved on research related to financial intermediation related topics such as shadow banking.

Contact

James Chapman

Assistant Chief
Financial Stability
Financial Studies

Bank of Canada
234 Laurier Avenue West
Ottawa, ON, K1A 0G9

Latest

21 February 2013 Conference Summary: Financial Intermediation and Vulnerabilities

The Bank of Canada’s annual economic conference, held in October 2012, brought together experts from across Canada and around the world to discuss key issues concerning financial intermediation and vulnerabilities. The conference covered such topics as household finances and their relationship to financial stability, as well as bank regulation, securitization and shadow banking.

Efficiency and Bargaining Power in the Interbank Loan Market

Using detailed loan transactions-level data we examine the efficiency of an overnight interbank lending market, and the bargaining power of its participants. Our analysis relies on the equilibrium concept of the core, which imposes a set of no-arbitrage conditions on trades in the market.

17 November 2011 Liquidity Provision and Collateral Haircuts in Payments Systems

Central banks play a pivotal role in well-functioning payments systems by providing liquidity via collateralized lending. This article discusses the role of collateral and haircut policy in central bank lending, as well as the distinguishing features of the central bank’s policy relative to private sector practices. It presents a model that explicitly incorporates the unique role of central banks in the payments system and argues that central banks must consider how their haircut policies affect the relative price and liquidity of assets, the market’s asset allocation, and the likelihood of participants to default. Furthermore, under extraordinary circumstances, there is a rationale for the central bank to temporarily reduce haircuts or broaden the list of eligible collateral to mitigate the shortage of liquidity in the market.

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Other

Journal Articles

  • “Central Bank Haircut Policy”
    (with Jonathan Chiu and Miguel Molico) Annals of Finance, Vol. 7, No. 3, (August 2011), pages 319-348
  • “A Model of Tiered Settlement Networks”
    (with Jonathan Chiu and Miguel Molico) Journal of Money, Credit and Banking, Forthcoming
  • “Rediscounting Under Aggregate Risk with Moral Hazard”
    (with Antoine Martin) Journal of Money, Credit and Banking, Forthcoming
  • "Bounding Revenue Comparisons across Multi-Unit Auction Formats under ?-Best Response"
    (with David McAdams and Harry J. Paarsch) American Economic Review, Vol. 97, No. 2 (May 2007), pages 455-458.
  • "Which Bank is the 'Central' Bank? An Application of Markov Theory to the Canadian Large-Value Transfer System"
    (with Morten Bech and Rod Garratt), Journal of Monetary Economics, Vol. 57, No. 3 (April 2010), pages 352-363.

Other Research

Work in Progress

  • "Matching in the Interbank Market"

Education

  • B.A. Economics Concordia University (1998)
  • M.A. Economics Concordia University (2001)
  • M.Sc Statistics University of Iowa (2006)
  • Ph.D. Economics University of Iowa (2006)

Research Interests

  • Money and Banking
  • Financial Intermediation
  • Payment and Settlement Systems

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