Carolyn A. Wilkins served as Senior Deputy Governor from May 2014 to December 2020. In this capacity, she oversaw the Bank’s strategic planning and economic and financial research. As a member of the Bank’s Governing Council, she shared responsibility for decisions with respect to monetary policy and financial system stability. Ms. Wilkins also oversaw the Bank’s analysis of international economic developments in support of monetary policy decisions and served as a member of the Bank’s Board of Directors.
Ms. Wilkins was the Bank of Canada’s G20 and G7 Deputy. She represented the Bank on the Financial Stability Board (FSB) Plenary and was a member of the FSB’s Standing Committee on Assessment of Vulnerabilities. She also served as a member of the International Monetary Fund’s High-Level Advisory Group on Finance and Technology and the Group of Trustees of the Principles for Stable Capital Flows and Fair Debt Restructuring at the Institute of International Finance. She previously represented Canada on the Basel Committee on Banking Supervision (BCBS) and co-chaired the BCBS Working Group on Liquidity.
During the COVID-19 pandemic, Ms. Wilkins oversaw the development of the Bank’s market liquidity facilities and large-scale asset purchase program. As Deputy Managing Director of the Financial Markets Department in 2008, she led the development and implementation of extraordinary liquidity tools and collateral policy deployed during the financial crisis.
Before her appointment as Senior Deputy Governor, Ms. Wilkins was Advisor to the Governor, with a focus on the Canadian economy, its interaction with the financial system, and monetary policy. As Managing Director of the Bank’s Financial Stability Department from 2011 to 2013, Ms. Wilkins led the Bank’s research and analysis of financial system issues in Canada and abroad. Prior to joining the Bank in 2001, Ms. Wilkins held senior analytical roles related to economic forecasting and fiscal policy development, at both the Department of Finance Canada and the Privy Council Office.
Ms. Wilkins was born in Peterborough, Ontario. She holds an Honours BA in Economics from Wilfrid Laurier University and an MA in Economics from the University of Western Ontario. She was named as a winner of Canada’s Most Powerful Women: Top 100 Award by the Women’s Executive Network in 2016 and 2018.
Closing remarksSenior Deputy Governor Carolyn A. Wilkins concluded a day-long workshop on the renewal of the monetary policy framework with a summary of the discussions, and she outlined next steps on the path to the 2021 renewal.
Opening remarksSenior Deputy Governor Carolyn A. Wilkins discusses the challenges the Bank of Canada is facing as it seeks to renew its inflation-control target in 2021. Kicking off a day-long workshop on the renewal of the monetary policy framework, she explains how the Bank’s research on alternative frameworks is shaping up and invites discussion of how the COVID-19 crisis has changed what is known about alternative policy tools in action.
Bridge to Recovery: The Bank’s COVID-19 Pandemic ResponseSenior Deputy Governor Carolyn A. Wilkins discusses measures the Bank has taken to address the COVID-19 pandemic and set the stage for recovery.
Our Economic Destiny: Written in R-stars?Senior Deputy Governor Carolyn A. Wilkins talks about how to navigate slow growth and discusses the types of policies that would help secure long-term prosperity.
Monetary Policy Frameworks in a World of Low Interest RatesArchived panel discussion hosted by the Bank for International Settlements at the American Economic Association’s 2020 Annual Meeting of Allied Social Science Associations.
Financial Stability in an Uncertain World (Full Remarks)Senior Deputy Governor Carolyn A. Wilkins provides an update on the Canadian financial system and discusses measures in place that increase its resilience in a challenging global environment.
Monetary Policy Report Press Conference Opening StatementSenior Deputy Governor Carolyn A. Wilkins discusses key issues involved in the Governing Council’s deliberations about the policy rate decision and the MPR.
Economic Progress Report: Investing in GrowthSenior Deputy Governor Carolyn A. Wilkins talks about the importance of business investment to the Canadian economy and reviews the latest interest rate decision.
Why Do Central Banks Care About Market Power?Senior Deputy Governor Carolyn A. Wilkins discusses how the competitive landscape and digitalization affect monetary policy and why central banks care about market power.
Staff discussion papers
Income Inequality in CanadaData show that income inequality in Canada increased substantially during the 1980s and first half of the 1990s but has been relatively stable over the past 25 years. This increase was felt mainly by low-income earners and younger people, while older people benefited from higher retirement income.
Crypto ‘Money’: Perspective of a Couple of Canadian Central BankersThe market for cryptoassets has exploded in size in the 10 years since bitcoin was launched. The technology underlying cryptoassets, blockchain, has also been held up as a technology that promises to transform entire industries.
Monetary Policy Under Uncertainty: Practice Versus TheoryFor central banks, conducting policy in an environment of uncertainty is a daily fact of life. This uncertainty can take many forms, ranging from incomplete knowledge of the correct economic model and data to future economic and geopolitical events whose precise magnitudes and effects cannot be known with certainty.
Asset-Price Misalignments and Monetary Policy: How Flexible Should Inflation-Targeting Regimes Be?The authors analyze the extent to which inflation-targeting frameworks should incorporate flexibility in order to respond to asset-price misalignments and other atypical events. They examine the costs and benefits of adding flexibility to the Bank's current inflation-targeting framework, and conclude that maintaining low and stable consumer price inflation is the best contribution that monetary policy […]
Staff working papers
Should Bank Capital Regulation Be Risk Sensitive?We present a simple model to study the risk sensitivity of capital regulation. A banker funds investment with uninsured deposits and costly capital, where capital resolves a moral hazard problem in the banker’s choice of risk.
Linear and Threshold Forecasts of Output and Inflation with Stock and Housing PricesThe authors examine whether simple measures of Canadian equity and housing price misalignments contain leading information about output growth and inflation.
Does Financial Structure Matter for the Information Content of Financial Indicators?Of particular concern to monetary policy-makers is the considerable unreliability of financial variables for predicting GDP growth and inflation.
Bank of Canada Review articles
Bank of Canada Liquidity Actions in Response to the Financial Market TurmoilIn response to the financial crisis of 2007-09, the Bank of Canada intervened repeatedly to stabilize the financial system and limit the repercussions of the crisis on the Canadian economy. This article reviews the extraordinary liquidity measures taken by the Bank during this period and the principles that guided the Bank's interventions. A preliminary assessment of the term liquidity facilities provided by the Bank suggests that they were an important source of liquidity support for some financial institutions and, on a broader basis, served to reduce uncertainty among market participants about the availability of liquidity, as well as helping to promote a return to well-functioning money markets.
Another Look at the Inflation-Target HorizonThe conduct of monetary policy within an inflation-targeting framework requires the establishment of an inflation-target horizon, which is the average time it takes inflation to return to the target. Policy-makers have an interest in communicating this horizon, since it is likely to help anchor inflation expectations. This article focuses on the determination of the appropriate policy horizon by reporting on two recent Bank of Canada studies. The evidence suggests that the current target horizon of six to eight quarters remains appropriate. It is important to note that the duration of the optimal inflation-target horizon varies widely, depending on the combination of shocks to the economy. In rare cases when the financial accelerator is triggered by a persistent shock, such as an asset-price bubble, it may be appropriate to take a longer view of the inflation-target horizon.
Asset Prices and Monetary Policy: A Canadian Perspective on the IssuesThe issue addressed in this article is the extent to which monetary policy in Canada should respond to asset-price bubbles. The article concludes that maintaining low and stable consumer price inflation is the best contribution that monetary policy can make to promoting economic and financial stability, even when the economy experiences asset-price bubbles. In extreme circumstances—when an asset-price bubble is well identified and likely to have significant costs to the economy when it bursts—monetary policy might better maintain low and stable consumer price inflation by leaning against a particular bubble even though it may mean that inflation deviates temporarily from its target. Such a strategy might reduce the risk that a crash in asset prices could lead to a recession and to inflation markedly below target in the longer run. The circumstances where this strategy is possible will be rare because economists are far from being able to determine consistently and reliably when leaning against a particular bubble is likely to do more harm than good. Housing-price bubbles should be a greater concern for Canadian monetary policy than equity-price bubbles, since rising housing prices are more likely to reflect excessively easy domestic credit conditions than are equity prices, which are largely determined in global markets.
The Evolving Financial System and Public Policy: Conference Highlights and LessonsAt the 12th annual Bank of Canada economic conference, held in Ottawa on 4 and 5 December 2003, representatives from various public and private organizations and Bank of Canada staff discussed papers presented on three key issues affecting the financial system: financial contagion, the implications of bank diversification, and financial sector regulation. Papers on financial contagion studied the effect of globalization on Canadian foreign-asset exposures, developed a general-equilibrium model of a competitive interfirm lending market in which firms can borrow or lend, and used market-based indicators to determine the probability that contagion can be generated by interbank exposures. The papers on bank diversification focused on the links between the changing behaviour of financial institutions and risk-return trade-offs. Issues of financial sector regulation included the relationship between governance and financial sector soundness, the theoretical basis of bank regulations for capital requirements, and the implications of bank capital requirements for the transmission of monetary policy. A panel discussion provided extended discussion of the conference papers.
Financial System Review articles
The Basel III Liquidity Standards: An Update
Strengthening the Infrastructure of Over-the-Counter Derivatives Markets
The Bank of Canada’s Extraordinary Liquidity Policies and Moral HazardBank of Canada published a report establishing a set of principles to guide the extraordinary liquidity interventions it was making in response to the systemic shocks buffeting the Canadian financial system. These principles provided a framework for maintaining consistency between the Bank’s actions and its responsibilities as lender of last resort to the financial system, while allowing sufficient fl exibility to respond to the unique challenges of the crisis.
Improving the Resilience of Core Funding Markets
Financial Market Turmoil and Central Bank InterventionIn this article, we consider central bank intervention to address financial market turmoil with a focus on the questions of why, when, and how a central bank might intervene. We set out a policy framework and identify appropriate central bank instruments to respond to extraordinary financial market turmoil, consistent with central bank policy goals and functions.
- Wilkins, C. (with T. Ahnert and J. Chapman). 2020. “Should Bank Capital Regulation Be Risk Sensitive?” Journal of Financial Intermediation, May 2020.
- Wilkins, C. (with G. Tkacz). 2008. “Linear and Threshold Forecasts of Output and Inflation with Stock and Housing Prices,” Journal of Forecasting, Vol. 27, Issue 2, pp. 131-151.
Publications from working groups
- Basel Committee on Banking Supervision (C. Wilkins co-chair of Working Group on Liquidity). 2014. “Basel III: the Net Stable Funding Ratio - consultative document.”
- Basel Committee on Banking Supervision (C. Wilkins co-chair of Working Group on Liquidity). 2014. “Guidance for Supervisors on Market-Based Indicators of Liquidity.”
- Basel Committee on Banking Supervision (C. Wilkins co-chair of Working Group on Liquidity). 2014. “Liquidity coverage ratio disclosure standards.”
- Canadian Over-the-Counter Derivatives Working Group (C. Wilkins Chair of Working Group). 2010. “Reform of Over-the-Counter (OTC ) Derivatives Markets in Canada: Discussion Paper from the Canadian OTC Derivatives Working Group.”
- Canadian Foreign Exchange Committee Working Group on the Performance of FX Markets over the Crisis (C. Wilkins Chair of Working Group). 2010. “The Canadian Foreign Exchange Market: Developments and Opportunities.”
- Committee on the Global Financial System Study Group on Cross Border Funding (C. Wilkins member of Study Group.) 2010. “The functioning and resilience of cross-border funding markets”. CGFS Paper No. 37.
- Wilkins, C. 1998. “Youth and the 1990s Labour Market,” Department of Finance Working Paper No. 98-08.
- Wilkins, C. (with F. Lee and S. James). 1992. “Estimating Trend Total Factor Productivity Growth in Canada,” Department of Finance Working Paper No. 92-03.
- Wilkins, C. (with M. Albert). 1989. “Closed Economy Analysis of the Dynamics of Deficits and Debt in a Unitary and Federal State,” Department of Finance Working Paper No. 89-01.