G10 - General

• November 13, 2014

  The Use of Financial Derivatives by Canadian Firms

  Bank of Canada Review - Autumn 2014 Teodora Paligorova, Rhonda Staskow

  In Canada, about one-third of publicly listed non-financial firms use financial derivatives. The use of derivatives is widespread across all sectors of the economy and increases during periods of greater uncertainty. Non-financial firms that use derivatives are typically larger and more profitable and have lower volatility of earnings than those that do not use derivatives. Overall, the firm characteristics of Canadian hedgers seem to be consistent with those found in other jurisdictions.

  Content Type(s): Publications, Bank of Canada Review articles JEL Code(s): G, G1, G10, G3, G32
• November 15, 2012

  Financial Transaction Taxes: International Experiences, Issues and Feasibility

  Bank of Canada Review - Autumn 2012 Anna Pomeranets

  The financial transaction tax (FTT) is a policy idea with a long history that, in the wake of the global financial crisis, has attracted renewed interest in some quarters. This article examines the evidence of the impact of an FTT on market quality and explores a few of the practical issues surrounding the implementation of an FTT. Proponents argue that an FTT will generate substantial tax revenues and reduce market volatility. The majority of the empirical evidence, however, supports the arguments of opponents of the tax who assert that an FTT reduces volume and liquidity and increases volatility. In addition, there are numerous challenges in implementing an FTT, which may reduce the intended revenues. Whether an FTT is beneficial hinges on its effect on market quality and its ability to raise revenues. However, there are many unanswered questions regarding its design.

  Content Type(s): Publications, Bank of Canada Review articles JEL Code(s): G, G0, G01, G1, G10, G18