Francisco Rivadeneyra is a Research Advisor in the Funds Management and Banking Department at the Bank of Canada. His research is broadly divided into financial economics and payments research. He is interested in how agent heterogeneity and payments infrastructure affect asset prices and welfare. His recent academic research focuses on the implications of technological innovations, for example electronic money and distributed ledger technologies, for the mandates of central banks. His recent policy work has been to develop computational tools to measure the risk and efficiency of payments systems. Earlier work focused on the management of domestic debt and foreign reserves portfolios.
Mr. Rivadeneyra holds a PhD in Economics from the University of Chicago.
We present a policy framework for electronic money and payments. The framework poses a set of positive questions related to the areas of responsibility of central banks: payments systems, monetary policy and financial stability. The questions are posed to four broad forms of e-money: privately or publicly issued, and with centralized or decentralized verification of transactions. This framework is intended to help evaluate the trade-offs that central banks face in the decision to issue new forms of e-money.
This article provides an overview of the growth of Canadian-dollar-denominated assets in official foreign reserves. Based on International Monetary Fund data and on internal Bank of Canada analysis, we estimate that the total reserve holdings of Canadian-dollar assets increased from negligible levels before 2008 to around US$200 billion in the third quarter of 2013. We discuss the determinants of this increase, as well as its potential impact on Canadian debt markets, for example, lower yields and therefore reduced financing costs for the Government of Canada, and the possible negative impact on market liquidity.
The Bank of Canada recently developed an asset-liability-matching model to aid in the management of Canada’s foreign exchange reserves. The model allows policy-makers at the Bank and the Department of Finance to analyze asset-allocation and funding-mix decisions by quantifying both the risk-return and liquidity trade-offs for the assets, as well as the risk-cost trade-offs of the funding liabilities.