Grahame Johnson

Grahame Johnson

Advisor

Executive

Bio

Grahame Johnson was appointed Advisor to the Governor, effective November 1, 2021. In this capacity, he provides advice on monetary policy operations and balance sheet management, the Bank of Canada’s fiscal agent activities, and international and domestic capital market forums. He also chairs the Bank’s Pension Fund Investment Committee. 

Mr. Johnson has extensive knowledge of markets, the financial system, and monetary and funds management policies. Before becoming an Advisor, Mr. Johnson was Managing Director of the Financial Markets Department (FMD). He also served as Managing Director of the Banking and Payments Department (BAP) and Financial Stability Department (FSD). Prior to that, he held increasingly senior roles in the Financial Risk Office and FMD. Before joining the Bank in 2001, he worked on the fixed-income trading desk of a major Canadian financial institution.  

Mr. Johnson is a native of Montréal, Québec. He has a degree in commerce from Queen’s University and holds a Chartered Financial Analyst designation. 

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Speeches

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Staff analytical notes

How does the Bank of Canada’s balance sheet impact the banking system?

Staff Analytical Note 2022-12 Daniel Bolduc-Zuluaga, Brad Howell, Grahame Johnson
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.
Content Type(s): Staff research, Staff analytical notes Topic(s): Financial institutions, Financial stability, Monetary policy JEL Code(s): E, E5, E51, G, G2, G21, G23, G3, G32

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Staff discussion papers

A Review of the Bank of Canada’s Market Operations related to COVID-19

Staff Discussion Paper 2023-6 Grahame Johnson
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.
Content Type(s): Staff research, Staff discussion papers Topic(s): Coronavirus disease (COVID-19), Financial markets, Financial stability JEL Code(s): D, D4, D47, E, E4, E41, E5, G, G0, G01, G1, G14, G2, G21, G23, H, H1, H12

Settlement Balances Deconstructed

Staff Discussion Paper 2022-13 Parnell Chu, Grahame Johnson, Scott Kinnear, Karen McGuinness, Matthew McNeely
Because of the COVID-19 pandemic, public interest in the Bank’s balance sheet and, more specifically, the size of settlement balances, has grown. This paper deconstructs the concept of settlement balances and provides some context on their history, current state and possible future evolution.
Content Type(s): Staff research, Staff discussion papers Topic(s): Central bank research, Coronavirus disease (COVID-19), Financial markets, Monetary policy implementation JEL Code(s): E, E5, E58, E59, E6, G, G0, G01

Implementation and Effectiveness of Extended Monetary Policy Tools: Lessons from the Literature

Staff Discussion Paper 2020-16 Grahame Johnson, Sharon Kozicki, Romanos Priftis, Lena Suchanek, Jonathan Witmer, Jing Yang
This paper summarizes the literature on the performance of various extended monetary policy tools when conventional policy rates are constrained by the effective lower bound. We highlight issues that may arise when these tools are used by central banks of small open economies.
Content Type(s): Staff research, Staff discussion papers Topic(s): Monetary policy, Monetary policy implementation, Monetary policy transmission JEL Code(s): E, E5, E52, E58, E6, E63

Implications of New Accounting Standards for the Bank of Canada's Balance Sheet

Staff Discussion Paper 2007-2 Mark Zelmer, Grahame Johnson
The Canadian Institute of Chartered Accountants (CICA) has implemented new accounting standards for the valuation and reporting of financial instruments. They are effective for the Bank of Canada in 2007. As a result of these changes, the Bank has begun valuing its holdings of Government of Canada treasury bills on a fair value basis and […]
Content Type(s): Staff research, Staff discussion papers Topic(s): Financial institutions, Monetary policy framework JEL Code(s): E, E5, E58, M, M4

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Staff working papers

An Empirical Analysis of the Canadian Term Structure of Zero-Coupon Interest Rates

Staff Working Paper 2004-48 David Bolder, Adam Metzler, Grahame Johnson
Zero-coupon interest rates are the fundamental building block of fixed-income mathematics, and as such have an extensive number of applications in both finance and economics.
Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, Financial markets, Interest rates JEL Code(s): C, C0, C6, E, E4, G, G1

Measuring Interest Rate Expectations in Canada

Staff Working Paper 2003-26 Grahame Johnson
Financial market expectations regarding future policy actions by the Bank of Canada are an important input into the Bank's decision-making process, and they can be measured using a variety of sources. The author develops a simple expectations-based model to focus on measuring interest rate expectations that are implied by the current level of money market yields.
Content Type(s): Staff research, Staff working papers Topic(s): Financial markets, Interest rates JEL Code(s): G, G1

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Bank publications

Bank of Canada Review articles

December 24, 2004

Government of Canada Yield-Curve Dynamics, 1986-2003

Bank of Canada Review - Winter 2004-2005 Grahame Johnson
A database of historical Government of Canada zero-coupon yield curves developed at the Bank of Canada is introduced in this article, which also includes an initial statistical analysis of the behaviour and evolution of the zero-coupon interest (spot) rates over the full period and two distinct subperiods. Specific areas of interest include the evolution of the levels of key interest rates and yield-curve measures over the sample as well as daily changes in the key interest rates and the yield-curve measures; the identification of a relatively small number of factors that drove the evolution of the yield curve; and the total returns that would have been realized by holding bonds of different maturities for a given holding period.
Content Type(s): Publications, Bank of Canada Review articles Topic(s): Debt management, Econometric and statistical methods, Financial markets
August 22, 2003

Measuring Interest Rate Expectations in Canada

Bank of Canada Review - Summer 2003 Grahame Johnson
Financial market expectations regarding future changes in the target for the overnight rate of interest are an important source of information for the Bank of Canada. Financial markets are the mechanism through which the policy rate affects other financial variables, such as longer-term interest rates, the exchange rate, and other asset prices. An accurate measure of their expectations can therefore help policy-makers assess the potential impact of contemplated changes. Johnson focuses on the expectations hypothesis, which measures expectations of future levels of the target overnight rate as implied by current money market yields. Although expectations can be derived from the current yield on any short-term fixed-income asset, some assets have proven to be more accurate predictors than others. The implementation of a policy of fixed-announcements dates has coincided with the increased predictive power of these short-term assets. As a result of this improvement, a relatively simple model of the yield curve can now provide an accurate measure of financial market expectations.
Content Type(s): Publications, Bank of Canada Review articles Topic(s): Exchange rates, Financial markets, Interest rates

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Financial System Review articles