This paper studies how the allocation of residual losses affects trading and welfare in a central counterparty. I compare loss sharing under two loss-allocation mechanisms – variation margin haircutting and cash calls – and study the privately and socially optimal degree of loss sharing.
We analyze the interaction between committed monetary policy and discretionary fiscal policy in a model with public debt, endogenous government expenditures, distortive taxation and nominal rigidities.
The Bank of Canada today announced that, effective 1 March 2017, it will make a series of changes to the number, frequency and calculation methodology of its published foreign exchange rates.
The Bank of Canada today announced the winners of The Governor’s Challenge, a new student competition in which teams simulate the role of advisor to the Bank’s Governing Council.