Financial stability - Bank of Canada
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Bank of Canada RSS Feedsen2024-03-28T23:06:54+00:00Decomposing Large Banks’ Systemic Trading Losses
https://www.bankofcanada.ca/2024/03/staff-working-paper-2024-6/
Do banks realize simultaneous trading losses because they invest in the same assets, or because different assets are subject to the same macro shocks? This paper decomposes the comovements of bank trading losses into two orthogonal channels: portfolio overlap and common shocks.2024-03-07T09:53:20+00:00enDecomposing Large Banks’ Systemic Trading Losses2024-03-07Financial institutionsFinancial stabilityStaff Working Paper 2024-6https://www.bankofcanada.ca/wp-content/uploads/2024/03/swp2024-6.pdfDecomposing Large Banks’ Systemic Trading LossesRadoslav RaykovMarch 2024GG1G10G11G2G20Mapping 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 system2024-01-15Flood risk and residential lending
https://www.bankofcanada.ca/2024/01/flood-risk-and-residential-lending/
We present key findings of a recent study that evaluates the credit risk that flooding poses to the residential lending activities of Canadian banks and credit unions. Results show that such risk currently appears modest but could become larger with climate change.2024-01-15T15:00:26+00:00enFlood risk and residential lending2024-01-15Procyclicality 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 2023GG0G01G2G23G28Climate-Related Flood Risk to Residential Lending Portfolios in Canada
https://www.bankofcanada.ca/2023/12/staff-discussion-paper-2023-33/
We assess the potential financial risks of current and projected flooding caused by extreme weather events in Canada. We focus on the residential real estate secured lending (RESL) portfolios of Canadian financial institutions (FIs) because RESL portfolios are an important component of FIs’ balance sheets and because the assets used to secure such loans are immobile and susceptible to climate-related extreme weather events.2023-12-20T15:56:24+00:00enClimate-Related Flood Risk to Residential Lending Portfolios in Canada2023-12-20Central bank researchClimate changeCredit risk managementEconometric and statistical methodsFinancial institutionsFinancial stabilityStaff Discussion Paper 2023-33https://www.bankofcanada.ca/wp-content/uploads/2023/12/sdp2023-33.pdfClimate-Related Flood Risk to Residential Lending Portfolios in CanadaCraig JohnstonGeneviève ValléeHossein HosseiniBrett LindsayMiguel MolicoMarie-Christine TremblayAidan WittsDecember 2023CC8C81GG2G21QQ5Q54Understanding 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 2023CC6C63GG0G01G1G10G2G20QQ5Q54Central Bank Crisis Interventions: A Review of the Recent Literature on Potential Costs
https://www.bankofcanada.ca/2023/12/staff-discussion-paper-2023-30/
Central banks’ actions to stabilize financial markets and implement monetary policy during crises may come with costs and side effects. We provide a literature review of these costs and discuss measures that may mitigate the negative impacts of crisis actions.2023-12-11T13:33:31+00:00enCentral Bank Crisis Interventions: A Review of the Recent Literature on Potential Costs2023-12-11Central bank researchFinancial institutionsFinancial marketsFinancial stabilityLender of last resortStaff Discussion Paper 2023-30https://www.bankofcanada.ca/wp-content/uploads/2023/12/sdp2023-30.pdfCentral Bank Crisis Interventions: A Review of the Recent Literature on Potential CostsPatrick AldridgeDavid CimonRishi ValaDecember 2023EE5E58GG1G10G2G20Getting used to higher interest rates
https://www.bankofcanada.ca/2023/11/getting-used-to-higher-interest-rates/
Senior Deputy Governor Carolyn Rogers talks about why interest rates could settle at a higher level than Canadians are used to and why preparing early for that possible outcome is important.2023-11-09T14:56:23+00:00Getting used to higher interest rates2023-11-09Carolyn RogersFinancial stability in a world of higher interest rates
https://www.bankofcanada.ca/2023/11/financial-stability-in-a-world-of-higher-interest-rates/
Senior Deputy Governor Carolyn Rogers talks about financial stability in an era of higher interest rates.2023-11-09T11:45:54+00:00Financial stability in a world of higher interest rates2023-11-09Carolyn RogersDecentralized finance: Innovations and challenges
https://www.bankofcanada.ca/2023/10/staff-analytical-note-2023-15/
Decentralized finance surged in popularity around 2020. We explore its value and limitations and highlight some potential regulatory concerns.2023-10-16T14:00:22+00:00enDecentralized finance: Innovations and challenges2023-10-16