E42 - Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems - Bank of Canada
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Bank of Canada RSS Feedsen2024-03-28T18:19:28+00:00Improving the Efficiency of Payments Systems Using Quantum Computing
https://www.bankofcanada.ca/2022/12/staff-working-paper-2022-53/
We develop an algorithm and run it on a hybrid quantum annealing solver to find an ordering of payments that reduces the amount of system liquidity necessary without substantially increasing payment delays.2022-12-22T14:14:19+00:00enImproving the Efficiency of Payments Systems Using Quantum Computing2022-12-22Digital currencies and fintechFinancial institutionsFinancial servicesFinancial system regulation and policiesPayment clearing and settlement systemsStaff Working Paper 2022-53https://www.bankofcanada.ca/wp-content/uploads/2022/12/swp2022-53.pdfImproving the Efficiency of Payments Systems Using Quantum ComputingChristopher McMahonDonald McGillivrayAjit DesaiFrancisco RivadeneyraJean-Paul LamThomas LoDanica MarsdenVladimir SkavyshDecember 2022CC6C61C63DD8D83EE4E42E5E58Regulatory 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 2022EE4E42E44E5E58GG2G23Archetypes for a retail CBDC
https://www.bankofcanada.ca/2022/10/staff-analytical-note-2022-14/
A variety of technology designs could support retail central bank digital currency (CBDC) systems. We develop five archetypes of CBDC systems, outline their characteristics and discuss their trade-offs. This work serves as a framework to analyze and compare different designs, independent of vendor, platform and implementation.2022-10-05T12:15:01+00:00enArchetypes for a retail CBDC2022-10-05PayTech and the D(ata) N(etwork) A(ctivities) of BigTech Platforms
https://www.bankofcanada.ca/2022/08/staff-working-paper-2022-35/
Why do BigTech platforms introduce payment services? We explore this using a model in which a monopoly platform faces a trade-off between the costs associated with privacy concerns and the revenue from data services. We then analyze the feedback effects between data and payments.2022-08-04T07:27:04+00:00enPayTech and the D(ata) N(etwork) A(ctivities) of BigTech Platforms2022-08-04Digital currencies and fintechPayment clearing and settlement systemsStaff Working Paper 2022-35https://www.bankofcanada.ca/wp-content/uploads/2022/08/swp2022-35.pdfPayTech and the D(ata) N(etwork) A(ctivities) of BigTech PlatformsJonathan ChiuThorsten KoepplAugust 2022DD8EE4E42LL1Transmission of Cyber Risk Through the Canadian Wholesale Payment System
https://www.bankofcanada.ca/2022/05/staff-working-paper-2022-23/
This paper studies how the impact of a cyber attack that paralyzes one or multiple banks' ability to send payments would transmit to other banks through the Canadian wholesale payment system. Based on historical payment data, we simulate a wide range of scenarios and evaluate the total payment disruption in the system.2022-05-16T11:11:07+00:00enTransmission of Cyber Risk Through the Canadian Wholesale Payment System2022-05-16Financial institutionsFinancial stabilityPayment clearing and settlement systemsStaff Working Paper 2022-23https://www.bankofcanada.ca/wp-content/uploads/2022/05/swp2022-23.pdfAnneke KosseZhentong LuMay 2022CC4C49EE4E42E47GG2G21Identifying Financially Remote First Nations Reserves
https://www.bankofcanada.ca/2022/05/staff-discussion-paper-2022-11/
Chen et al. (2021) show that almost one-third of First Nations band offices in Canada are within 1 kilometre (km) of an automated banking machine (ABM) or financial institution (FI) branch and more than half are within 5 km.2022-05-03T13:16:11+00:00enIdentifying Financially Remote First Nations Reserves2022-05-03Bank notesDigital currencies and fintechFinancial institutionsFinancial servicesPayment clearing and settlement systemsStaff Discussion Paper 2022-11https://www.bankofcanada.ca/wp-content/uploads/2022/05/sdp2022-11.pdfIdentifying Financially Remote First Nations ReservesHeng ChenWalter EngertKim HuynhDaneal O’HabibMay 2022EE4E41E42E5GG2G21Equilibrium in Two-Sided Markets for Payments: Consumer Awareness and the Welfare Cost of the Interchange Fee
https://www.bankofcanada.ca/2022/03/staff-working-paper-2022-15/
We construct and estimate a structural two-stage model of equilibrium in a market for payments in order to quantify the network externalities and identify the main determinants of consumer and merchant decisions.2022-03-22T08:54:14+00:00enEquilibrium in Two-Sided Markets for Payments: Consumer Awareness and the Welfare Cost of the Interchange Fee2022-03-22Bank notesDigital currencies and fintechEconometric and statistical methodsFinancial servicesStaff Working Paper 2022-15https://www.bankofcanada.ca/wp-content/uploads/2022/03/swp2022-15.pdfStaff Working Paper 2022-15Kim HuynhGradon NichollsOleksandr ShcherbakovMarch 2022CC5C51DD1D12EE4E42LL1L14Macroeconomic Predictions Using Payments Data and Machine Learning
https://www.bankofcanada.ca/2022/03/staff-working-paper-2022-10/
We demonstrate the usefulness of payment systems data and machine learning models for macroeconomic predictions and provide a set of econometric tools to overcome associated challenges.2022-03-04T11:15:37+00:00enMacroeconomic Predictions Using Payments Data and Machine Learning2022-03-04Business fluctuations and cyclesEconometric and statistical methodsPayment clearing and settlement systemsStaff Working Paper 2022-10https://www.bankofcanada.ca/wp-content/uploads/2022/03/swp2022-10.pdfMacroeconomic Predictions Using Payments Data and Machine LearningJames ChapmanAjit DesaiMarch 2022CC5C53C55EE3E37E4E42E5E52Payment Coordination and Liquidity Efficiency in the New Canadian Wholesale Payments System
https://www.bankofcanada.ca/2022/02/staff-discussion-paper-2022-3/
We study the impact of the Bank of Canada’s choice of settlement mechanism in Lynx on participant behaviors, liquidity usage, payment delays and the overall operational efficiency of the new system.2022-02-04T10:04:08+00:00enPayment Coordination and Liquidity Efficiency in the New Canadian Wholesale Payments System2022-02-04Payment clearing and settlement systemsStaff Discussion Paper 2022-3https://www.bankofcanada.ca/wp-content/uploads/2022/02/sdp2022-3.pdfPayment Coordination and Liquidity Efficiency in the New Canadian Wholesale Payments SystemFrancisco RivadeneyraNellie ZhangFebruary 2022CC5EE4E42E5E58