Joshua Slive is a Senior Policy Advisor in the Strategic Leadership & Support Division of the Financial Stability Department. He has conducted research and worked on domestic and international policy measures related to the reform of OTC derivatives markets. His research also focuses on market structure and liquidity on trading platforms. Before joining the Bank of Canada, Joshua was on the Finance faculty at the HEC Montreal business school. He has a Ph.D. in Finance from the University of British Columbia.
We use a suite of risk-assessment models to examine the possible impact of a hypothetical house price correction, centred in the Toronto and Vancouver areas. We also assume financial stress significantly amplifies the macroeconomic impact of the house price decline.
We use models to better understand and assess how risks could affect the financial system. In our hypothetical scenario, a house price correction and elevated financial stress weigh on the economy. An increased number of households and businesses have difficulty repaying loans. Nonetheless, the large banks remain resilient.
Changes in technology and regulation have resulted in an increasing number of trading venues in equity markets in Canada. New trading platforms have intensified price competition and have encouraged innovation, and they do not appear to have segmented trade. But the increasingly complex market structure has necessitated investments in expensive technology and has introduced new operational risks. Regulatory responses should be carefully adapted to retain the competition and innovation associated with this market fragmentation.
An international initiative to increase the use of central clearing for OTC derivatives emerged as one of the reactions to the 2008 financial crisis. The move to central clearing is a fundamental change in the structure of the market.
“Access to central counterparties: why it matters and how it is changing,” (with Timothy Lane and Jean-Philippe Dion), 2013, Banque de France Financial Stability Review No 17.
“Estimating the gains from trade in limit-order markets”, (with Burton Hollifield, Robert A. Miller and Patrik Sandas), Journal of Finance LXI(6), 2006
“Pirated for Profit”, (with Dan Bernhardt), Canadian Journal of Economics, 1998.
Publications From Working Groups:
“Feasibility study on approaches to aggregate OTC derivatives data” Financial Stability Board, 2014.
“Macroeconomic impact assessment of OTC derivatives regulatory reforms” Bank for International Settlements Macroeconomic Assessment Group on Derivatives, 2013.
“The macrofinancial implications of alternative configurations for access to central counterparties in OTC derivatives markets” Committee on the Global Financial System Study Group, 2011, CGFS Paper No 46.
“Price formation and liquidity supply” (2008)
“Dynamic Strategies in Limit Order Markets” (2008)
“The Diversification Cost of Capital Gains Taxes with Multiple Risky Assets”, (with Lorenzo Garlappi and Vasant Naik).
“Asymmetric Information in Limit Order Markets” (2002).