Staff research

• Understanding Systemic Risks in the Canadian Financial System

  Staff analytical paper 2026-28 Gabriel Bruneau, Sascha Clazie-Thomson, Thibaut Duprey, Ruben Hipp, Javier Ojea Ferreiro, Kerem Tuzcuoglu

  This paper reviews recent efforts to monitor and assess systemic risk in the Canadian financial system and outlines a framework for future system-wide stress testing.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): G, G0, G01, G1, G17, G18, G2, G21, G23, G28 Research Theme(s): Financial system, Financial stability and systemic risk

• Monetary Policy in a Volatile World: ToTEM Simulations

  Staff analytical paper 2026-27 Edward Booth, Edouard Djeutem, Oleksiy Kryvtsov, Fanny McKellips, Yang Zhang

  Using simulations of the Bank of Canada’s projection model, we assess inflation risks from greater supply-shock volatility and show that monetary policy faces sharper trade-offs, as stabilizing inflation increasingly comes at the cost of weaker real activity.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): E, E3, E31, E32, E5, E52, E58 Research Theme(s): Models and tools, Economic models, Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission

• Everything You Want to Know About the Bank’s Standing Liquidity Facility… But were too afraid to ask!

  Staff analytical paper 2026-26 Kaetlynd McRae, Jessie Ziqing Chen

  The Standing Liquidity Facility (SLF) is one of the Bank of Canada’s least discussed tools—and one of its most important. Embedded directly in Canada’s high value payment system, Lynx, the SLF operates quietly in the background every business day, ensuring the smooth settlement of payments and reinforcing the implementation of monetary policy.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): E, E4, E41, E42, E44, E5, E58, E59, G, G2, G21, G28 Research Theme(s): Financial markets and funds management, Market functioning, Financial system, Financial institutions and intermediation, Monetary policy, Monetary policy tools and implementation, Money and payments, Payment and financial market infrastructures

• Unpacking interest rate uncertainty in 2025

  Staff analytical paper 2026-25 Harshbir Kaur, Rishi Vala

  Amid heightened Canada–US trade tensions in 2025, financial markets showed signs that investors had greater difficulty anticipating near-term Bank of Canada interest rate decisions. We look at the Overnight Index Swap prices and intraday Government of Canada yields to identify the main driver of uncertainty around interest rate decisions.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): C, C5, C58, D, D5, D53, E, E4, E44, E5, E52, E58 Research Theme(s): Financial markets and funds management, Market functioning, Models and tools, Econometric, statistical and computational methods, Monetary policy, Monetary policy framework and transmission

• Deglobalization and Trade Fragmentation: Implications for the Inflation-Output Trade-Off

  Staff analytical paper 2026-24 Matteo Cacciatore, Daniela Hauser, Yuko Imura

  How do deglobalization and rising trade costs affect monetary policy? A two-country, multi-sector model of Canada and the United States shows that bilateral trade-cost shocks generate a manageable inflation–output trade-off under the existing framework — but larger or more persistent shocks would make look-through policies costlier and riskier.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): D, D5, D57, E, E5, E52, E58, F, F1, F13, F4, F41, F6, F62 Research Theme(s): Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation, Structural challenges, International trade, finance and competitiveness

• Recent Evidence on the Resiliency of Flexible Inflation Targeting

  Staff analytical paper 2026-23 Edoardo Briganti, Wei Dong, Olena Kostyshyna, Soyoung Lee, Florent Samson, Rodrigo Sekkel

  This paper assesses the resilience of flexible inflation targeting in the presence of large and persistent supply shocks.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): E, E5, E52 Research Theme(s): Monetary policy, Monetary policy framework and transmission

• Optimal Conventional and Unconventional Monetary Policy Mix

  Staff working paper 2026-18 Sami Alpanda, Serdar Kabaca, Kostas Mavromatis

  We show that in a heterogeneous economy, optimal policy after cost-push shocks raises short-term rates to curb inflation while lowering long-term rates to support indebted households, speeding investment and output recovery while increasing consumption inequality.

  Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, E40, E43, E5, E52 Research Theme(s): Models and tools, Economic models, Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation

• Survey Evidence on Firm AI Adoption and its Implications

  Staff analytical paper 2026-22 Chanya Chawla, Crystal Arnburg

  This paper analyzes AI adoption among Canadian firms using December 2025 Business Leaders’ Pulse data. It finds that while personal use is widespread, operational adoption remains limited. Firms expect modest positive impacts on capital spending and small net negative effects on employment over the next three years.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): E, E0, E2, E22, E24, O, O3, O33 Research Theme(s): Structural challenges, Digitalization and productivity
• June 1, 2026

  Quarterly Research Update – 2026 Q1

  This newsletter features the latest research publications by Bank of Canada economists including external publications and working papers published on the Bank of Canada’s website.

  Content Type(s): Staff research, Research newsletters