G23 - Non-bank Financial Institutions; Financial Instruments; Institutional Investors - Bank of Canada
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Bank of Canada RSS Feedsen2024-03-28T17:51:23+00:00Procyclicality in Central Counterparty Margin Models: A Conceptual Tool Kit and the Key Parameters
https://www.bankofcanada.ca/2023/12/staff-discussion-paper-2023-34/
Regulators need to provide effective procyclicality guidance, and central counterparties must design and calibrate their margin systems and procyclicality frameworks appropriately. To serve these needs, we provide a novel conceptual tool kit. Further, we highlight that the focus should be on the key margin system parameters in determining procyclicality.2023-12-29T11:12:20+00:00enProcyclicality in Central Counterparty Margin Models: A Conceptual Tool Kit and the Key Parameters2023-12-29Coronavirus disease (COVID-19)Credit risk managementFinancial institutionsFinancial marketsFinancial stabilityFinancial system regulation and policiesStaff Discussion Paper 2023-34https://www.bankofcanada.ca/wp-content/uploads/2023/12/sdp2023-34.pdfProcyclicality in Central Counterparty Margin Models: A Conceptual Tool Kit and the Key ParametersAlper OdabasiogluDecember 2023GG0G01G2G23G28Do hedge funds support liquidity in the Government of Canada bond market?
https://www.bankofcanada.ca/2023/08/staff-analytical-note-2023-11/
While Government of Canada bond transactions of hedge funds are typically in the opposite direction to those of other market participants, during the peak period of market turmoil in March 2020, hedge funds sold these bonds, just as other market participants did. This shows that hedge funds can at times contribute to one-sided markets and amplify declines in market liquidity.2023-08-01T11:00:33+00:00enDo hedge funds support liquidity in the Government of Canada bond market?2023-08-01A Review of the Bank of Canada’s Market Operations Related to COVID-19
https://www.bankofcanada.ca/2023/03/staff-discussion-paper-2023-6/
This paper reviews the range of extraordinary programs launched by the Bank of Canada in response to the pandemic-related financial market disruption. It provides some recommendations for future interventions to ensure the programs are appropriately structured for the financial and economic stresses they are intended to address.2023-03-29T12:30:11+00:00enA Review of the Bank of Canada’s Market Operations Related to COVID-192023-03-29Coronavirus disease (COVID-19)Financial marketsFinancial stabilityStaff Discussion Paper 2023-6https://www.bankofcanada.ca/wp-content/uploads/2023/03/sdp2023-6.pdfStaff Discussion Paper 2023-6Grahame JohnsonMarch 2023DD4D47EE4E41E5GG0G01G1G14G2G21G23HH1H12Stress Relief? Funding Structures and Resilience to the Covid Shock
https://www.bankofcanada.ca/2023/01/staff-working-paper-2023-7/
Funding structures affected the amount of financial stress different countries and sectors experienced during the spread of COVID-19 in early 2020. Policy responses targeting specific vulnerabilities were more effective at mitigating this stress than those supporting banks or the economy more broadly.2023-01-30T08:46:15+00:00enStress Relief? Funding Structures and Resilience to the Covid Shock2023-01-30Coronavirus disease (COVID-19)Exchange ratesFinancial institutionsFinancial stabilityFinancial system regulation and policiesInternational topicsStaff Working Paper 2023-7https://www.bankofcanada.ca/wp-content/uploads/2023/01/swp2023-7.pdfStress Relief? Funding Structures and Resilience to the Covid ShockKristin ForbesChristian FriedrichDennis ReinhardtJanuary 2023EE4E44E6E65FF3F31F36F4F42GG1G18G2G23G3G38Stablecoins and Their Risks to Financial Stability
https://www.bankofcanada.ca/2022/11/staff-discussion-paper-2022-20/
What risks could stablecoins pose to the financial system? We argue that the stabilization mechanisms of stablecoins give rise to the risk of confidence runs, which can propagate to broader cryptoasset markets and the traditional financial sector. We also argue that stablecoins can contribute to financial stability risks by facilitating the buildup of leverage and liquidity mismatch in decentralized finance. Such risks cannot be addressed by ensuring the price stability of stablecoins alone. Finally, we explore the potential implications of stablecoins for the current system of bank-intermediated credit and for monetary policy.2022-11-28T14:39:47+00:00frStablecoins and Their Risks to Financial Stability2022-11-28Digital currencies and fintechFinancial institutionsFinancial marketsFinancial stabilityFinancial system regulation and policiesStaff Discussion Paper 2022-20https://www.bankofcanada.ca/wp-content/uploads/2022/11/sdp2022-20.pdfStaff Discussion Paper 2022-20Cameron MacDonaldLaura ZhaoNovember 2022EE4E42E44E5E58GG2G23Considerations for the allocation of non-default losses by financial market infrastructures
https://www.bankofcanada.ca/2022/11/staff-analytical-note-2022-16/
Non-default losses of financial market infrastructures (FMIs) have gained attention due to their potential impacts on FMIs and FMI participants, and the lack of a common approach to address them. A key question is, who should absorb these losses?2022-11-03T12:32:09+00:00enConsiderations for the allocation of non-default losses by financial market infrastructures2022-11-03How does the Bank of Canada’s balance sheet impact the banking system?
https://www.bankofcanada.ca/2022/09/staff-analytical-note-2022-12/
We examine how changes in the Bank of Canada’s balance sheet impact the banking system. Quantitative easing contributed to an increase in the size of the banking system’s balance sheet and an improvement in bank liquidity coverage ratios. Quantitative tightening is expected to partially reverse these impacts. The banking system will have to adjust its liquidity management strategy in response.2022-09-22T10:00:41+00:00enHow does the Bank of Canada’s balance sheet impact the banking system?2022-09-22Cyber Risk and Security Investment
https://www.bankofcanada.ca/2022/07/staff-working-paper-2022-32/
We develop a principal-agent model of cyber-attacking with fee-paying clients who delegate security decisions to financial platforms. We derive testable implications about clients’ vulnerability to cyber attacks and about the fees charged.2022-07-14T12:03:41+00:00enCyber Risk and Security Investment2022-07-14Economic modelsFinancial servicesFinancial stabilityFinancial system regulation and policiesPayment clearing and settlement systemsStaff Working Paper 2022-32https://www.bankofcanada.ca/wp-content/uploads/2022/07/swp2022-32.pdfCyber Security and Ransomware in Financial MarketsToni AhnertMichael BrolleyDavid CimonRyan RiordanJuly 2022DD7D78D8D81GG1G18G2G21G23Unregulated Lending, Mortgage Regulations and Monetary Policy
https://www.bankofcanada.ca/2022/06/staff-working-paper-2022-28/
This paper evaluates the effectiveness of macroprudential policies when regulations are uneven across mortgage lender types. We look at credit tightening that results from macroprudential regulations and examine how much of it is counteracted by credit shifting to unregulated lenders. We also study the impact of monetary policy tightening when some lenders are unregulated.2022-06-27T10:05:32+00:00enUnregulated Lending, Mortgage Regulations and Monetary Policy2022-06-27Financial institutionsFinancial system regulation and policiesMonetary policy transmissionStaff Working Paper 2022-28https://www.bankofcanada.ca/wp-content/uploads/2022/06/swp2022-28.pdfStaff Working Paper 2022-28Ugochi EmenoguBrian PetersonJune 2022EE4E44E5E50E52E58GG2G21G23G28How well can large banks in Canada withstand a severe economic downturn?
https://www.bankofcanada.ca/2022/05/staff-analytical-note-2022-6/
We examine the potential impacts of a severe economic shock on the resilience of major banks in Canada. We find these banks would suffer significant financial losses but nevertheless remain resilient. This underscores the role well-capitalized banks and sound underwriting practices play in supporting economic activity in a downturn.2022-05-24T15:00:17+00:00enHow well can large banks in Canada withstand a severe economic downturn?2022-05-24