G21 - Banks; Depository Institutions; Micro Finance Institutions; Mortgages

• How will mortgage payments change at renewal? An updated analysis

  Staff Analytical Note 2025-21 Claudia Godbout, Adam Su, Yang Xu

  We update an assessment of potential changes in payments that mortgage holders could face at renewal in 2025 and 2026. We use an enhanced dataset (RESL2) that provides a more accurate starting point for mortgage balances.

  Content Type(s): Staff research, Staff analytical notes Research Topic(s): Credit and credit aggregates, Financial institutions, Financial stability, Housing, Interest rates, Recent economic and financial developments JEL Code(s): D, D1, D12, D14, G, G2, G21, G28, R, R2, R20

• Non-bank financial intermediation: Canada’s submission to the 2024 global monitoring report

  Staff Analytical Note 2025-19 Elba Gomez Navas Acevedo, Thomas Thorn

  We share insights about non-bank financial intermediation in Canada in 2023. These data were collected as part of the Bank of Canada’s contribution to the Financial Stability Board’s Global Monitoring Report on Non-Bank Financial Intermediation.

  Content Type(s): Staff research, Staff analytical notes Research Topic(s): Financial institutions, Sectoral balance sheet JEL Code(s): G, G2, G21, G22, G23

• The Optimum Quantity of Central Bank Reserves

  Staff Working Paper 2025-15 Jonathan Witmer

  This paper analyzes the optimal quantity of central bank reserves in an economy where reserves and other financial assets provide liquidity benefits. Using a static model, I derive a constrained Friedman rule that characterizes the socially optimal level of reserves, demonstrating that this quantity is neither necessarily large nor small but depends on the marginal benefits of reserves relative to alternative safe assets.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Financial institutions, Financial markets, Financial system regulation and policies, Monetary policy implementation JEL Code(s): E, E4, E41, E42, E5, E58, G, G2, G21, G28

• The Prudential Toolkit with Shadow Banking

  Staff Working Paper 2025-9 Kinda Hachem, Martin Kuncl

  Can regulators keep pace with banks’ creative regulatory workarounds? Our analysis unpacks the trade-offs between fixed regulations and crisis-triggered rules, showing that the latter are especially prone to circumvention—and can trigger larger, costlier bailouts.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Financial institutions, Financial stability, Financial system regulation and policies JEL Code(s): D, D6, D62, E, E6, E61, G, G0, G01, G2, G21, G28

• Effects of macroprudential policy announcements on perceptions of systemic risks

  Staff Analytical Note 2025-4 Thibaut Duprey, Victoria Fernandes, Kerem Tuzcuoglu, Ruhani Walia

  We introduce a history of macroprudential policy (MPP) events in Canada since the 1980s. We document the short-run effects of MPP announcements on market-based measures of systemic risk and find that MPPs can influence the market’s perception of large banks’ resilience.

  Content Type(s): Staff research, Staff analytical notes Research Topic(s): Econometric and statistical methods, Financial institutions, Financial stability, Financial system regulation and policies JEL Code(s): E, E5, E58, G, G2, G21, G28, G3, G32

• Non-Bank Dealing and Liquidity Bifurcation in Fixed-Income Markets

  Staff Working Paper 2025-2 Michael Brolley, David Cimon

  We model non-bank entry into fixed-income markets and state-dependent liquidity. Non-bank financial institutions improve liquidity more during normal times than in stress. Banks may become less reliable to marginal clients, exacerbating the difference in liquidity between normal and stressed times. Central bank lending during stress may limit this harmful division.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Financial institutions, Financial markets, Market structure and pricing JEL Code(s): G, G1, G10, G2, G20, G21, G23, L, L1, L10, L13, L14

• The International Exposure of the Canadian Banking System

  Staff Working Paper 2025-1 Christian Friedrich, Hanno Friedrich, Nick Lawrence, Javier Cortes Orihuela, Phoebe Tian

  In 2023, the share of Canadian banks’ foreign assets and liabilities amounted to around 50%. While Canadian banks engage domestically mostly with households and non-financial corporations, their most common counterparties abroad are non-bank financial institutions.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Financial institutions, Financial stability, International financial markets, International topics JEL Code(s): F, F2, F21, F23, F3, F31, F32, G, G2, G21, G23, G3

• Using new loan data to better understand mortgage holders

  Staff Analytical Note 2025-1 Odae Al Aboud, Saarah Sheikh, Adam Su, Yang Xu

  The Bank of Canada is using an enhanced dataset that tracks the stock of outstanding mortgages and home equity lines of credit held by federally regulated lenders. This paper highlights some of the new details in the dataset and how they impact the Bank’s understanding of the mortgage market.

  Content Type(s): Staff research, Staff analytical notes Research Topic(s): Credit and credit aggregates, Financial institutions, Interest rates, Recent economic and financial developments JEL Code(s): D, D1, D12, D14, G, G2, G21, G28

• Interaction of Macroprudential and Monetary Policies: Practice Ahead of Theory

  Staff Discussion Paper 2024-18 Thibaut Duprey, Yaz Terajima, Jing Yang

  We draw on the Canadian experience to examine how monetary and macroprudential policies interact and possibly complement each other in achieving their respective price and financial stability objectives.

  Content Type(s): Staff research, Staff discussion papers Research Topic(s): Financial stability, Monetary policy JEL Code(s): E, E3, E37, E5, E52, E58, E6, E61, G, G0, G01, G2, G21, G28

• Mortgage stress tests and household financial resilience under monetary policy tightening

  Staff Analytical Note 2024-25 Jonathan Hartley, Nuno Paixão

  This note analyzes mortgage stress tests, a macroprudential tool. We find that when mortgage stress tests are applied to all mortgage purchase originations, they improve credit quality and reduce credit and house price growth. They also improve the resilience of borrowers to financial shocks, such as the large increase in interest rates during 2022–23.

  Content Type(s): Staff research, Staff analytical notes Research Topic(s): Credit and credit aggregates, Financial institutions, Financial system regulation and policies, Monetary policy JEL Code(s): E, E5, E52, G, G2, G21, G28, G5, G50, G51