Financial system regulation and policies - Bank of Canada
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Bank of Canada RSS Feedsen2024-03-29T15:58:35+00:00Regulatory Requirements of Banks and Arbitrage in the Post-Crisis Federal Funds Market
https://www.bankofcanada.ca/2022/11/staff-working-paper-2022-48/
This paper explains the nature of interest rates in the U.S. federal funds market after the 2007-09 financial crisis. We build a model of the over-the-counter lending market that incorporates new aspects of the financial system: abundance of liquidity, different regulatory standards for banks, and arbitrage opportunities created by limited access to the facility granting interest on excess reserves.2022-11-28T14:49:49+00:00enRegulatory Requirements of Banks and Arbitrage in the Post-Crisis Federal Funds Market2022-11-28Central bank researchEconomic modelsFinancial institutionsFinancial marketsFinancial stabilityFinancial system regulation and policiesWholesale fundingStaff Working Paper 2022-48https://www.bankofcanada.ca/wp-content/uploads/2022/11/swp2022-48.pdfStaff Working Paper 2022-48Rodney J. GarrattSofia PriazhkinaNovember 2022EE4E42E5E58GG2G28Stablecoins and Their Risks to Financial Stability
https://www.bankofcanada.ca/2022/11/staff-discussion-paper-2022-20/
What risks could stablecoins pose to the financial system? We argue that the stabilization mechanisms of stablecoins give rise to the risk of confidence runs, which can propagate to broader cryptoasset markets and the traditional financial sector. We also argue that stablecoins can contribute to financial stability risks by facilitating the buildup of leverage and liquidity mismatch in decentralized finance. Such risks cannot be addressed by ensuring the price stability of stablecoins alone. Finally, we explore the potential implications of stablecoins for the current system of bank-intermediated credit and for monetary policy.2022-11-28T14:39:47+00:00frStablecoins and Their Risks to Financial Stability2022-11-28Digital currencies and fintechFinancial institutionsFinancial marketsFinancial stabilityFinancial system regulation and policiesStaff Discussion Paper 2022-20https://www.bankofcanada.ca/wp-content/uploads/2022/11/sdp2022-20.pdfStaff Discussion Paper 2022-20Cameron MacDonaldLaura ZhaoNovember 2022EE4E42E44E5E58GG2G23Considerations for the allocation of non-default losses by financial market infrastructures
https://www.bankofcanada.ca/2022/11/staff-analytical-note-2022-16/
Non-default losses of financial market infrastructures (FMIs) have gained attention due to their potential impacts on FMIs and FMI participants, and the lack of a common approach to address them. A key question is, who should absorb these losses?2022-11-03T12:32:09+00:00enConsiderations for the allocation of non-default losses by financial market infrastructures2022-11-03