Financial stability and systemic risk

• Central Bank Liquidity Facilities and Market Making

  Staff working paper 2022-9 David Cimon, Adrian Walton

  We create a theoretical model of central bank asset purchases. The model helps explain how, in a crisis, these purchases ease pressures on investment dealers.

  Content Type(s): Staff research, Staff working papers JEL Code(s): G, G1, G10, G2, G20, L, L1, L10 Research Theme(s): Financial markets and funds management, Market functioning, Financial system, Financial institutions and intermediation, Financial stability and systemic risk, Monetary policy, Monetary policy tools and implementation

• The Financial Origins of Non-fundamental Risk

  Staff working paper 2022-4 Sushant Acharya, Keshav Dogra, Sanjay Singh

  We explore the idea that the financial sector can be a source of non-fundamental risk to the rest of the economy. We also consider whether policy can be used to reduce this risk—either by increasing the supply of publicly backed safe assets or by reducing the demand for safe assets.

  Content Type(s): Staff research, Staff working papers JEL Code(s): D, D5, D52, D8, D84, E, E6, E62, G, G1, G10, G12 Research Theme(s): Financial markets and funds management, Market functioning, Financial system, Financial stability and systemic risk, Household and business credit, Monetary policy, Monetary policy tools and implementation

• Assessing Climate-Related Financial Risk: Guide to Implementation of Methods

  Technical report No. 120 Hossein Hosseini Jebeli, Craig Johnston, Craig Logan, Miguel Molico, Xiangjin Shen, Marie-Christine Tremblay

  A pilot project on climate transition scenarios by the Bank of Canada and the Office of the Superintendent of Financial Institutions assessed climate-related credit and market risks. This report describes the project’s methodologies and provides guidance on implementing them.

  Content Type(s): Staff research, Technical reports JEL Code(s): C, C5, C53, C8, C83, G, G1, G3, G32 Research Theme(s): Financial system, Financial stability and systemic risk, Models and tools, Econometric, statistical and computational methods, Structural challenges, Climate change

• Transition Scenarios for Analyzing Climate-Related Financial Risk

  Staff discussion paper 2022-1 Y.-H. Henry Chen, Erik Ens, Olivier Gervais, Hossein Hosseini Jebeli, Craig Johnston, Serdar Kabaca, Miguel Molico, Sergey Paltsev, Alex Proulx, Argyn Toktamyssov

  Climate transition scenarios clarify climate-related risks to our economy and financial system. This paper summarizes key results of Canada-relevant scenarios developed in a pilot project on climate risk by the Bank of Canada and the Office of the Superintendent of Financial Institutions.

  Content Type(s): Staff research, Staff discussion papers JEL Code(s): C, C6, C68, D, D5, D58, E, E5, E50, O, O4, O44, P, P1, P18, Q, Q5, Q54 Research Theme(s): Financial system, Financial stability and systemic risk, Models and tools, Economic models, Structural challenges, Climate change

• Housing demand in Canada: A novel approach to classifying mortgaged homebuyers

  Staff analytical note 2022-1 Mikael Khan, Yang Xu

  We introduce a novel approach to categorize mortgaged homebuyers into first-time homebuyers, repeat homebuyers and investors. We show how these groups contribute to activity in Canadian housing markets, and we analyze the differences in their demographic and financial characteristics.

  Content Type(s): Staff research, Staff analytical notes JEL Code(s): R, R2, R21, R3, R31 Research Theme(s): Financial system, Financial stability and systemic risk, Household and business credit