Charles Gaa is a Senior Policy Advisor in the Canadian Economic Analysis Department. In this capacity, he is part of the leadership team that guides and manages the work of the department. He leads the department’s contribution to the Monetary Policy Report and conducts research and analysis on topics related to the Bank’s monetary policy and financial system functions. Charles first joined the Bank of Canada in 1999 in the Financial Markets Department, where he worked for several years before leaving to continue his studies. Prior to re-joining the Bank of Canada in the Financial Stability Department in 2013, he was on the faculty at the University of Oregon. Charles holds a PhD in Finance from the University of British Columbia and is a CFA charterholder.
Staff Analytical Notes
The stability of the Canadian financial system, as well as its ability to support the Canadian economy, depends on the ability of financial institutions to absorb and manage major shocks. This is especially true for large banks, which perform services essential to the Canadian economy.
Staff Working Papers
The authors contrast the impact of two sources of information flow on the volatility of prices, trading activity, and liquidity in the brokered interdealer market for Government of Canada bonds.
The authors empirically measure Canadian bond market liquidity using a number of indicators proposed in the literature and detail, for the first time, price and trade dynamics in the Government of Canada secondary bond market. They find, consistent with Inoue (1999), that the Canadian brokered interdealer fixed-income market is relatively liquid for its size.
This paper investigates the effects of the continuation of globalization and technological developments on the future of national-level financial markets and trading centres, particularly in smaller countries such as Canada. We foresee the development of a single global market in the most-liquid assets based on equity-market linkages.
Bank of Canada Review articles
August 16, 2001
Innovations in communications and information technology and the related globalization of financial markets have created the potential for important changes to the structure of Canadian equity markets. Established marketplaces can now compete more effectively on an inter-regional and international basis. At the same time, reduced costs have lowered the barriers to entry faced by new competitors known as alternative trading systems (ATSs). In response to this heightened competition, established Canadian stock exchanges have taken measures to improve market quality.
While regulators see innovation as positive for the development of Canadian markets, there is some concern that market liquidity may be fragmented in the short run. The Canadian Securities Administrators have proposed a framework that attempts to address this issue and that would allow ATSs to compete with traditional exchanges for the first time.
The authors provide an overview of the Canadian equity market and its structure, focusing on these recent developments.