Alejandro García - Latest - Bank of Canada
https://www.bankofcanada.ca/rss-feeds/
Bank of Canada RSS Feedsen2024-03-29T03:31:07+00:00Central Bank Collateral Policy: Insights from Recent Experience
https://www.bankofcanada.ca/wp-content/uploads/2011/05/zorn.pdf
The collateral policy of central banks played a critical role during the recent financial crisis, as they worked to bolster liquidity and alleviate the funding pressures facing financial institutions. This article examines central bank collateral policy and discusses three areas in which central banks can use their collateral policy to influence financial market practices: promoting greater transparency for securitized products, improving practices related to credit risk, and reducing procyclicality in the management of market risk.2011-05-19T07:05:09+00:00enCentral Bank Collateral Policy: Insights from Recent Experience2011-05-19Understanding Corporate Bond Spreads Using Credit Default Swaps
https://www.bankofcanada.ca/wp-content/uploads/2010/06/garcia.pdf
Corporate bond spreads worldwide have widened markedly since the beginning of the credit crisis in 2007. This article examines default and liquidity risk–the main components of the corporate bond spread–for Canadian firms that issue bonds in the U.S. market, focusing in particular on their evolution during the credit crisis. They find that, during this period, the liquidity component increased more for speculative-grade bonds than it did for investment-grade bonds, consistent with a "flight-to-quality" phenomenon. An important implication of their results for policy-makers seeking to address problems in credit markets is that the liquidity risk in corporate spreads for investment and speculative bonds behaves differently than the default risk, especially during crisis episodes.2009-09-11T09:52:29+00:00enUnderstanding Corporate Bond Spreads Using Credit Default Swaps2009-09-11