Bank of Canada Review Article - Bank of Canada
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Bank of Canada RSS Feedsen2024-03-28T14:46:21+00:00Collateral Management in the LVTS by Canadian Financial Institutions
https://www.bankofcanada.ca/wp-content/uploads/2010/06/dsouza1.pdf
This article examines the incentives for banks to hold various assets on their balance sheets for use as collateral when the opportunity cost of doing so can be high. Focusing on the five-year period (2002-07) that preceded the financial crisis, it examines the choices made by financial institutions among the assets that are pledged as collateral in Canada's Large Value Transfer System. This serves as a baseline for collateral-management practices during relatively normal times. The results of this study are important for policy-makers, especially the Bank of Canada, which is concerned both about the efficient functioning of fixed-income markets and about the credit risk it ultimately bears in insuring LVTS settlement. The results suggest that relative market liquidity and market-making capacity are important factors in the choice of securities pledged as collateral in the LVTS.2009-06-11T12:34:54+00:00enCollateral Management in the LVTS by Canadian Financial Institutions2009-06-11The Complexities of Financial Risk Management and Systemic Risks
https://www.bankofcanada.ca/wp-content/uploads/2010/06/milne1.pdf
Risk-management systems in financial institutions have come under increasing scrutiny in light of the current financial crisis, resulting in calls for improvements and an increased role for regulators. Yet such objectives miss the intricacy at the heart of the risk-management process. This article outlines the complexity inherent in any modern risk-management system, which arises because there are shortcuts in the theoretical models that risk managers need to be aware of, as well as the difficulties in sensible calibration of model parameters. The author suggests that prudential regulation of such systems should focus on failures within the financial firm and in the market interactions between firms and reviews possible strategies that can improve the performance of risk management and microprudential regulatory practice.2009-06-11T12:05:32+00:00enThe Complexities of Financial Risk Management and Systemic Risks2009-06-11The Changing Pace of Labour Reallocation in Canada: Causes and Consequences
https://www.bankofcanada.ca/wp-content/uploads/2010/06/leung1.pdf
The number of job gains and losses across firms in Canada each year is roughly one-fifth the total number of jobs and generally occurs within sectors (industries) rather than across sectors. Since labour reallocation within sectors has been strongly related to productivity growth in Canada, defining the key drivers of this type of reallocation is important, given the higher rates of reallocation and productivity growth in the Untied States than in Canada. This article finds that the appreciation of the Canadian dollar and rising commodity prices led to above-average reallocation of labour across sectors over the 2005-08 period, but that the impact on productivity has been minor. Labour reallocation across firms, however, generates substantial labour productivity gains in manufacturing and the business sector as a whole.2009-06-11T12:00:49+00:00enThe Changing Pace of Labour Reallocation in Canada: Causes and Consequences2009-06-11BoC-GEM: Modelling the World Economy
https://www.bankofcanada.ca/wp-content/uploads/2010/06/lalonde1.pdf
BoC-GEM, an adaptation of the Global Economy Model, initially developed at the International Monetary Fund and the New York Federal Reserve, is a very useful tool to tackle a broad range of issues pertinent to the current economic context, such as the recent movements in commodity prices and the adjustment of global imbalances. This article describes the structure and functioning of BoC-GEM and details some examples of recent application in the areas of monetary policy and issues in the real economy and questions of financial stability and describes ongoing research into introducing a financial sector into the model.2009-06-11T09:56:39+00:00enBoC-GEM: Modelling the World Economy2009-06-11