Posts

  • November 25, 2002

    Debt-Strategy Consultations 2003/04 - Views Sought on Issues Relating to the Design and Operation of Government Debt Programs in 2003/04 and Beyond

    A consultation document on issues relating to the design and operation of government debt programs for fiscal year 2003/04 and beyond, prepared jointly by the Department of Finance and the Bank of Canada, was published today. Debt-strategy planning is based on the fiscal outlook in the 2002 Economic and Fiscal Update released 30 October 2002, which projects that government borrowing in financial markets will remain near current levels.
    Content Type(s): Press, Market Notices
  • November 25, 2002

    Turnaround Time and Timing for Government of Canada Securities Auctions and Repurchase Operations

    Effective 9 December 2002, the turnaround time for Government of Canada securities auctions will be reduced from 15 minutes to 10 minutes, and the turnaround time for repurchase operations will be reduced from 30 minutes to 15 minutes. Coincident with these changes, the submission deadline for buybacks on a cash basis will be advanced from 1:15 p.m to 1:00 p.m.
    Content Type(s): Press, Market Notices
  • November 22, 2002

    Bank of Canada Announces Retirement of Deputy Governor Charles Freedman

    Today, the Bank of Canada announced that Deputy Governor Charles (Chuck) Freedman will retire from the Bank effective 5 September 2003.
    Content Type(s): Press, Press Releases
  • November 21, 2002

    Is Canada Dollarized?

    The sharp depreciation of the Canadian dollar and the successful launch of the euro have sparked a lively debate in Canada about the possible benefits of formally adopting the U.S. dollar as our national currency. Some observers have suggested that this debate is largely irrelevant, since Canada is already highly "dollarized." Canadian businesses and households, they assert, often use the U.S. dollar to perform standard money functions in preference to their own currency. Very little evidence has been provided, however, to support these claims. The authors review the available data with a view to drawing some tentative conclusions about the extent to which Canada has already been informally dollarized. The evidence suggests that many of the concerns that have been expressed about the imminent demise of the Canadian dollar have been misplaced. The Canadian dollar continues to be used as the principal unit of account, medium of exchange, and store of value within our borders. Moreover, there is no indication that dollarization is likely to take hold in the foreseeable future. Indeed, in many respects, the Canadian economy is less dollarized now than it was 20 years ago.
  • November 21, 2002

    Bank of Canada Review - Autumn 2002

    BoC Review - Autumn 2002

    Cover page

    Business College Currency

    The artifacts pictured on the cover form part of the National Currency Collection, Bank of Canada.

    Photographed by Gord Carter, Ottawa

  • November 20, 2002

    CLS Bank: Managing Foreign Exchange Settlement Risk

    In the foreign exchange market, where average daily turnover is in trillions of dollars and trades span time zones, legal systems, and domestic payments systems, participants take on various risks. The most serious risk is credit risk—the risk that one party will fail to pay. Central banks, private sector financial institutions, and domestic payments systems operators laboured for more than a decade to develop a multi-currency settlement system to deal with these risks. The result, the CLS Bank, began operations in September 2002. It virtually eliminates the credit risk inherent in foreign exchange transactions by providing a payment-versus-payment arrangement for settlement. The CLS Bank is regulated by the Federal Reserve Board in consultation with the central banks that have currencies settling through its system. At present there are seven currencies, including the Canadian dollar. The Bank of Canada acts as banker for the CLS Bank, providing it with a settlement account and making and receiving payments on its behalf through the Large Value Transfer System. With the participation and support of the world's largest foreign-exchange-dealing institutions, and growing membership, the CLS Bank has the potential to become the dominant global mechanism for settling foreign exchange transactions.
  • November 19, 2002

    Purchasing-Power Parity: Definition, Measurement, and Interpretation

    This article examines the concept of purchasing-power parity (PPP) and its implications for the equilibrium value of the Canadian exchange rate. PPP has two main applications, as a theory of exchange rate determination and as a means to compare living standards across countries. Concerning exchange rate determination, PPP is mainly useful as a reminder that monetary policy has no long-run impact on the real exchange rate, since the exchange rate can deviate persistently from its PPP value in response to real shocks. To compare living standards across countries, PPP exchange rates constructed by comparing the prices of national consumption baskets are used to translate per capita national incomes into a common currency. These rates are useful because they offset differences in national price levels to obtain comparable measures of purchasing power, but they are not an accurate measure of the equilibrium value of the exchange rate. The authors conclude that the current deviation of the Canadian exchange rate from the PPP rate does not imply that the exchange rate is undervalued, but that this deviation reflects the impact of persistent real factors, in particular, lower commodity prices.
  • November 18, 2002

    Governor Explains How the Bank of Canada Promotes Canada's Economic and Financial Welfare

    In a speech to the Calgary Chamber of Commerce, Bank of Canada Governor David Dodge today outlined some of the ways in which the central bank contributes to Canada's economic and financial welfare.
    Content Type(s): Press, Press Releases
  • November 18, 2002

    Promoting Canada's Economic and Financial Welfare

    Remarks David Dodge Calgary Chamber of Commerce Calgary, Alberta
    It's been a difficult year for many sectors of the Alberta economy. Certainly, the severe drought hurt many western farmers, and investment in the energy sector was held back by low oil and gas prices. In addition, the slump in the telecom sector has affected Calgary.
    Content Type(s): Press, Speeches
  • November 12, 2002

    Staying the Course

    Remarks David Dodge a panel discussion at the Banco de México Mexico City, Mexico
    The dramatic events of the last two years and growing concern about the near-term prospects for the global economy have created a climate in which policy-makers focus only on current economic developments and lose sight of longer-term goals.
    Content Type(s): Press, Speeches

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