Adrian Walton - Latest - Bank of Canada
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Bank of Canada RSS Feedsen2024-03-29T06:04:21+00:00Price Caps in Canadian Bond Borrowing Markets
https://www.bankofcanada.ca/2019/01/staff-analytical-note-2019-2/
Price controls, or caps, can lead to shortages, as 1970’s gasoline price controls illustrate. One million trades show that the market for borrowing bonds in Canada has an implicit price cap: traders are willing to pay no more than the overnight interest rate to borrow a bond. This suggests the probability of a shortage increases when interest rates are very low.2019-01-14T11:47:36+00:00enPrice Caps in Canadian Bond Borrowing Markets2019-01-14