Staff analytical papers

• The Impact of Mortgage Interest Costs on Rental Inflation Amid Population Growth

  Staff analytical paper 2026-14 Amina Enkhbold, Serdar Kabaca

  This note finds evidence of a positive and nonlinear relationship between mortgage interest costs (MIC) and rental inflation: the impact of MIC on rents is small when population growth is near its historical norm, but significantly stronger during periods of rapid population growth.

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

• DeFi Lending: Returns, Leverage, and Liquidation Risk

  Staff analytical paper 2026-13 Jonathan Chiu, Furkan Danisman

  DeFi lending with proper governance is operationally viable, but it also faces constraints related to capital efficiency, liquidation risk, and systemic fragility within the crypto ecosystem.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): E, E5, E50, E58 Research Theme(s): Money and payments, Digital assets and fintech, Payment and financial market infrastructures

• Examining the macro drivers of mortgage arrears in Canada

  Staff analytical paper 2026-12 Thomas Michael Pugh, Tao Wang, Taylor Webley

  Mortgage debt represents over 70% of all Canadian household financial liabilities, and the performance of these debts is critical to the health of the financial system. We explore the relationships between mortgage arrears and key macroeconomic fundamentals such as labour market variables, interest rates, house prices and inflation. We then develop a framework to assess future household mortgage stress.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): E, E2, E3, E37, E5, G, G5, G51 Research Theme(s): Financial system, Financial stability and systemic risk, Household and business credit, Models and tools, Econometric, statistical and computational methods, Monetary policy, Real economy and forecasting

• Government of Canada Fixed-Income Market Ecology II: Government of Canada Bond Dealing

  Staff analytical paper 2026-11 Petr Kocourek, Adrian Walton

  This analytical paper examines the organization of Government of Canada bond dealing. We focus on dealers’ hedging and funding practices, the market infrastructures that support those practices, and trading costs across the yield curve. This paper builds on earlier work discussing Canada’s fixed-income market: "Government of Canada Fixed-Income Market Ecology."

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): G, G1, G10, G2, G20, H, H6, H63 Research Theme(s): Financial markets and funds management, Market functioning, Market structure, Financial system, Financial institutions and intermediation, Financial stability and systemic risk

• Repo transaction costs and balance sheet frictions

  Staff analytical paper 2026-10 Yanis Belkacem, Fabienne Schneider, Adrian Walton

  We develop an approach to quantify transaction costs in the repo market using OTC transaction data, where quoted bid-ask spreads are not observable. By estimating effective spreads at the level of individual trades, we construct a novel metric to evaluate intermediation costs across different segments of the market.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): G, G1, G10, G12, G2, G20 Research Theme(s): Financial markets and funds management, Financial system, Financial institutions and intermediation, Financial stability and systemic risk

• The Governor’s Challenge: A Decade of Success

  Staff analytical paper 2026-9 James Chapman, Stéphanie Houle, Lawrence L. Schembri

  The Governor’s Challenge (GC) by the Bank of Canada marked its tenth year as a successful outreach and education initiative, designed to strengthen public understanding of macroeconomics and monetary policy.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): E, E5

• Project Samara Research Paper

  Staff analytical paper 2026-8 Rakesh Arora, Umar Faruqui, Scott Hendry, Dinesh Shah, André Usche

  Project Samara was a real‑world experiment testing distributed ledger technology and wholesale central bank digital money for bond issuance and settlement in Canada. It demonstrated technical feasibility and potential efficiency and risk‑reduction benefits, while highlighting important trade‑offs related to complexity, governance, and regulatory alignment.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): E, E4, E42, E5, E58, G, G2, G28, O, O3, O33 Research Theme(s): Financial markets and funds management, Funds management, Market structure, Money and payments, Digital assets and fintech, Payment and financial market infrastructures

• Macro News in Market Moves: Classifying News through Asset Co-movements

  Staff analytical paper 2026-7 Bruno Feunou, Jean-Sébastien Fontaine, Rishi Vala

  This paper introduces CLONE, a method that decomposes asset price movements into aggregate demand, productivity, inflation, and monetary policy news, using stocks, bonds, and inflation swaps. CLONE simplicity and forward-looking focus helps guide policymakers in determining the economic drivers behind asset price movements.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): E, E3, E32, E4, E44, G, G1, G12, G14 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Monetary policy, Monetary policy framework and transmission

• How Do Some Lower-Income Canadians Pay

  Staff analytical paper 2026-6 Jerry Buckland, Christopher Henry, Wendy Nur, Aidan Romanow-Bear, Stephen Wild

  Previous research suggests that lower-income Canadians may have unique experiences with the use of payments, including the use of cash and digital payments. We conduct a case study using data from [the Canadian Financial Diaries project/Canadian financial diaries] to gain insight into how some lower-income Canadians pay.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): D, D8, D83, E, E4, E41 Research Theme(s): Money and payments, Cash and bank notes, Retail payments

• The aggregate and heterogeneous effects of responding to shelter inflation

  Staff analytical paper 2026-5 Michael Irwin, Matías Vieyra

  This note examines how monetary policy responses to shelter inflation affect both the overall economy and different households. We find that the aggregate macroeconomic effects of responding to shelter inflation are modest, whereas the redistributive consequences across households are substantially larger.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): E, E2, E3, E4, E5, G, G5 Research Theme(s): Monetary policy, Monetary policy framework and transmission