February 6, 2001
Monetary Policy Report Update – February 2001
On 23 January, the Bank reduced the Bank Rate by one-quarter of one percentage point to 5 3/4 per cent.
Publications
-
-
January 30, 2001
Annual Report 2001
The year that just passed posed many challenges for all Canadians. The slowdown in the global economy became more pronounced as the year went on, and this affected households, businesses, and governments alike. The tragedy of 11 September compounded the economic difficulties and issues facing us all. Through this period of rapidly changing circumstances, the Bank met its responsibilities by responding quickly and vigorously to events in order to underpin confidence and support the economy. -
January 29, 2001
Annual Report 2000
The Canadian economy continued to expand robustly in 2000 while inflation remained low. -
January 16, 2001
Bank of Canada Review - Winter 2000-2001
Cover page
Intaglio Master Plate—Bank of Canada, 1954 Series $5
The intaglio plate shown here is made of steel and measures approximately 8 1/4 x 4 3/4 inches. Together with the note, the engraver's chisel, and eyeglass, it is part of the National Currency Collection, Bank of Canada.
Photography by James Zagon.
-
-
December 17, 2000
Dynamic General-Equilibrium Models and Why the Bank of Canada is Interested in Them
Dynamic general-equilibrium models (DGEMs) are being increasingly used in macroeconomic research. In this article, the author describes the main features of these models and outlines their contribution to economic research performed at the Bank of Canada. He notes that the basic principle of DGEMs is that the modelling of economic activity, even on a scale as large as the economy of a country, should start with a series of microeconomic problems (at the scale of individuals), which, once resolved, are aggregated to represent the macroeconomic reality described by the model. -
December 16, 2000
The Bank of Canada's Management of Foreign Currency Reserves
This article describes the Bank's management of the liquid foreign currency portion of the government's official reserves. It broadly outlines the operations of the Exchange Fund Account (EFA), the main account in which Canada's reserves are held. It then briefly reviews the evolution of the objectives and management of the EFA over the past 25 years, particularly in light of the changing level of reserves and developments in financial markets. The EFA is funded by Canada's foreign currency borrowings in capital markets. The article focuses on the comprehensive portfolio framework used to manage the Account, which matches assets and liabilities. Under this framework, funds are invested in assets that match, as closely as possible, the characteristics of foreign currency liabilities issued, helping to immunize the portfolio against currency and interest rate risks. -
December 15, 2000
The Federal Government's Use of Interest Rate Swaps and Currency Swaps
Interest rate swaps and currency swaps are contracts in which counterparties agree to exchange cash flows according to a pre-arranged formula over a period of time. Since 1985, the federal government has been using such swaps to manage its liabilities in a cost-effective and flexible manner. The authors outline the characteristics of swap agreements and the ways in which the government uses them. They show that the swap program has been cost-effective, estimating that past and projected savings exceed $500 million. The authors also discuss the methods that the government uses to monitor the counterparty credit risk associated with these transactions. -
November 16, 2000
Credit Derivatives
Credit derivatives are a useful tool for lenders who want to reduce their exposure to a particular borrower but are unwilling to sell their claims on that borrower. Without actually transferring ownership of the underlying assets, these contracts transfer risk from one counterparty to another. Commercial banks are the major participants in this growing market, using these transactions to diversify their portfolios of loans and other risky assets. The authors examine the size and workings of this relatively new market and discuss the potential of these transactions for distorting existing incentives for risk management and risk monitoring. -
November 16, 2000
Bank of Canada Review - Autumn 2000
Cover page
Chinese Emergency Money
This note measures approximately six by ten inches, and forms part of the National Currency Collection, Bank of Canada.
Photography by James Zagon.