Ben Fung



Ben co-leads the Bank’s digital currency research initiative with Scott Hendry (FBD).  His current focus is studying the potential roles of the central bank in retail payments and, in particular, the issuance of central bank digital currency.

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Staff Analytical Notes

Cashless Bank Branches in Canada

Staff Analytical Note 2019-29 Walter Engert, Ben Fung
Cashless or tellerless bank branches have proliferated in several countries in recent years. In a cashless bank branch, teller or counter services such as cash withdrawals, deposits and cheque-cashing are not available.

Explaining Unusual Cash Patterns in 2018

Staff Analytical Note 2019-22 Walter Engert, Ben Fung, Jozsef Molnar, Gradon Nicholls
There was an unusually large decline of bank notes in circulation in October 2018. Some have argued that this was due to the legalization of cannabis in Canada in mid-October.

Merchant Acceptance of Cash and Credit Cards at the Point of Sale

Staff Analytical Note 2018-1 Ben Fung, Kim Huynh, Kerry Nield, Angelika Welte
Recent data show that the use of credit cards in Canada has been increasing, while the use of cash has been declining. At the same time, only two-thirds of small or medium-sized businesses accept credit cards.

Staff Discussion Papers

A Tale of Two Countries: Cash Demand in Canada and Sweden

Staff Discussion Paper 2019-7 Walter Engert, Ben Fung, Björn Segendorf
Cash use for payments has been steadily decreasing in many countries, including Canada and Sweden. This might suggest an evolution toward a cashless society. But in Canada, cash in circulation relative to GDP has been stable for decades and has even increased in recent years. By contrast, the cash-to-GDP ratio in Sweden has been falling steadily. What has caused this difference? Are there lessons to be learned from comparing the Canadian and Swedish experiences?

Is a Cashless Society Problematic?

Staff Discussion Paper 2018-12 Walter Engert, Ben Fung, Scott Hendry
The use of bank notes in Canada for payments has declined consistently for some time, and similar trends are evident in other countries. This has led some observers to predict a cashless society in the future.

Central Bank Digital Currency: Motivations and Implications

Staff Discussion Paper 2017-16 Walter Engert, Ben Fung
The emergence of digital currencies such as Bitcoin and the underlying blockchain and distribution ledger technology have attracted significant attention. These developments have raised the possibility of considerable impacts on the financial system and perhaps the wider economy.

Central Bank Digital Currencies: A Framework for Assessing Why and How

Staff Discussion Paper 2016-22 Ben Fung, Hanna Halaburda
Digital currencies have attracted strong interest in recent years and have the potential to become widely adopted for use in making payments. Public authorities and central banks around the world are closely monitoring developments in digital currencies and studying their implications for the economy, the financial system and central banks.

Electronic Money and Payments: Recent Developments and Issues

Staff Discussion Paper 2014-2 Ben Fung, Miguel Molico, Gerald Stuber
The authors review recent developments in retail payments in Canada and elsewhere, with a focus on e-money products, and assess their potential public policy implications.

Staff Working Papers

Swedish Riksbank Notes and Enskilda Bank Notes: Lessons for Digital Currencies

Staff Working Paper 2018-27 Ben Fung, Scott Hendry, Warren E. Weber
This paper examines the experience of Sweden with government notes and private bank notes to determine how well the Swedish experience corresponds to that of Canada and the United States. Sweden is important to study because it has had government notes in circulation for more than 350 years, and it had government notes before private bank notes.

Canadian Bank Notes and Dominion Notes: Lessons for Digital Currencies

Staff Working Paper 2017-5 Ben Fung, Scott Hendry, Warren E. Weber
This paper studies the period in Canada when both private bank notes and government-issued notes (Dominion notes) were simultaneously in circulation. Because both of these notes shared many of the characteristics of today's digital currencies, the experience with these notes can be used to draw lessons about how digital currencies might perform.

The Impact of Retail Payment Innovations on Cash Usage

Staff Working Paper 2012-14 Ben Fung, Kim Huynh, Leonard Sabetti
Many predict that innovations in retail payment may render cash obsolete. We investigate this possibility in the context of recent payment innovations such as contactless-credit and stored-value cards.

Counterfeit Quality and Verification in a Monetary Exchange

Staff Working Paper 2011-4 Ben Fung, Enchuan Shao
Recent studies on counterfeiting in a monetary search framework show that counterfeiting does not occur in a monetary equilibrium. These findings are inconsistent with the observation that counterfeiting of bank notes has been a serious problem in some countries.
Content Type(s): Staff Research, Staff Working Papers Topic(s): Bank notes JEL Code(s): D, D8, D82, D83, E, E4, E42, E5, E50

Taylor Rules in the Quarterly Projection Model

Staff Working Paper 2002-1 Ben Fung, Dinah Maclean, Jamie Armour
In recent years, there has been a lot of interest in Taylor-type rules. Evidence in the literature suggests that Taylor-type rules are optimal in a number of models and are fairly robust across different models.

Uncovering Inflation Expectations and Risk Premiums From Internationally Integrated Financial Markets

Staff Working Paper 1999-6 Ben Fung, Scott Mitnick, Eli Remolona
Theory and empirical evidence suggest that the term structure of interest rates reflects risk premiums as well as market expectations about future inflation and real interest rates. We propose an approach to extracting such premiums and expectations by exploiting both the comovements among interest rates across the yield curve and between two countries, Canada and […]

Monetary Shocks in the G-6 Countries: Is There a Puzzle?

Staff Working Paper 1997-7 Ben Fung, Marcel Kasumovich
This paper attempts to reduce the uncertainty about the dynamics of the monetary transmission mechanism. Central to this attempt is the identification of monetary policy shocks. Recently, VAR approaches that use over-identifying restrictions have shown success in isolating such shocks.

Overnight Rate Innovations as a Measure of Monetary Policy Shocks in Vector Autoregressions

Staff Working Paper 1996-4 Walter Engert, Ben Fung, Jamie Armour
The authors examine the Bank of Canada's overnight rate as a measure of monetary policy in vector autoregression (VAR) models. Since the time series of the Bank's current measure of the overnight rate begins only in 1971, the authors splice it to day loan rate observations to obtain a sufficiently long period of data.

Searching for the Liquidity Effect in Canada

Staff Working Paper 1994-12 Ben Fung, Rohit Gupta
This paper examines the empirical evidence of the liquidity effect in Canada. In the presence of the liquidity effect, the initial impact of an unanticipated expansionary monetary policy is to lower nominal and real interest rates for a short period of time.

Journal Publications

Refereed Journals

Other publications

  • "Modelling Financial Channels for Monetary Policy Analysis."
    (with Ian Christensen and Césaire Meh) Bank of Canada Review (Autumn 2006)
  • "Yield and inflation differentials between Canada and the United States,"
    (with Eli Remolona). Proceedings of the Bank of Canada Conference on "Information in Financial Asset Prices." 1999.
  • "The stance of monetary policy"
    (with M. Yuan). Proceedings of the Bank of Canada Conference on "Money, Monetary Policy, and Transmission Mechanism." 2000.
  • "Composition of US Dollar foreign exchange reserves by instrument"
    (with R. McCauley), Bank for International Settlements Quarterly Review, November 2000, pp.59-60.
  • "How active are central banks in managing their US dollar reserve portfolios?"
    (with R. McCauley), Bank for International Settlements Quarterly Review, March 2001, pp.31-32.
  • "Analyzing the growth of Taiwanese deposits in foreign currency,"
    (with R. McCauley), Bank for International Settlements Quarterly Review, September 2001, pp. 49-56.
  • "China's Asset Management Corporations"
    (with G. Ma), Bank for International Settlements Working Paper, 115.
  • "A VAR analysis of the effects of monetary policy in East Asia",
    Bank for International Settlements Working Paper, 119.
  • "Public asset management companies in East Asia,"
    (with J. George, S. Hohl, and G. Ma), Financial Stability Institute Occasional Paper No. 3, February 2004

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