H. Evren Damar - Latest - Bank of Canada
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Bank of Canada RSS Feedsen2024-03-29T11:52:09+00:00An Analysis of Indicators of Balance-Sheet Risks at Canadian Financial Institutions
https://www.bankofcanada.ca/wp-content/uploads/2012/08/review-summer12-chen.pdf
This article examines four indicators of balance-sheet risks—leverage, capital, asset liquidity and funding—among different types of financial institutions in Canada over the past three decades. It also discusses relevant developments in the banking sector that could have contributed to the observed dynamics. The authors find that the various risk indicators decreased during the period for most of the non-Big Six financial institutions, but remained relatively unchanged for the Big Six banks. In addition, the balance-sheet risk indicators became more heterogeneous across financial institutions. The observed overall decline and increased heterogeneity follow certain regulatory changes, such as the introduction of the liquidity guidelines on funding in 1995 and the implementation of bank-specific leverage requirements in 2000. Given that these regulations required more balance-sheet risk management, they have likely contributed to the increased resilience of the banking sector.2012-08-16T08:39:22+00:00enAn Analysis of Indicators of Balance-Sheet Risks at Canadian Financial Institutions2012-08-16Household Insolvency in Canada
https://www.bankofcanada.ca/wp-content/uploads/2012/02/boc-review-winter11-12-allen.pdf
With increasing levels of household debt in recent years, the number of households that may be vulnerable to a negative economic shock is rising as well. Decisions made by both the debtor and the creditor can contribute to insolvency. This article presents some stylized facts about insolvency in Canada’s household sector and analyzes the role of creditors in insolvencies. The average debt of an individual filing for bankruptcy is more than 1.5 times that of an average Canadian household; bankruptcy filers tend to be unemployed or in low-wage jobs, and are typically renters. The article reports that banks that approve more loans per branch, which is interpreted as less-intensive use of soft information (such as the loan officer’s assessment of the applicant’s character), experience more client bankruptcies. This finding has important policy implications, because financial institutions that do not use soft information risk further deterioration in their lending portfolios.2012-02-23T10:00:21+00:00enHousehold Insolvency in Canada2012-02-23