Bio

Miguel Molico was appointed Senior Research Director in the Financial Markets Department (FMD) in February 2024. In this role, he provides strategic direction and leadership for FMD’s research and policy work. In recent years, Miguel led the Bank’s analysis and research on the financial stability implications of climate change.  

Previously, he held the role of Senior Research Director in FSD from 2014 to 2020, and in the Funds Management and Banking Department (FBD) between 2010 and 2014. Prior to joining the Bank in 2006, Miguel held academic positions at the University of Western Ontario and Penn State University. He holds a PhD in economics from the University of Pennsylvania. 

Miguel primary research interests include monetary theory, monetary policy implementation, climate change, and payment systems. His research has been published in leading academic journals, including the Journal of Monetary Economics, the Journal of Economic Theory, the International Economic Review, the Review of Economic Dynamics, and the Journal of Money, Credit and Banking.

Research Field(s): Macroeconomics Monetary and Fiscal Policy Payments Economics

Staff research

Climate-Related Flood Risk to Residential Lending Portfolios in Canada

Staff discussion paper 2023-33 Craig Johnston, Geneviève Vallée, Hossein Hosseini Jebeli, Brett Lindsay, Miguel Molico, Marie-Christine Tremblay, Aidan Witts
We assess the potential financial risks of current and projected flooding caused by extreme weather events in Canada. We focus on the residential real estate secured lending (RESL) portfolios of Canadian financial institutions (FIs) because RESL portfolios are an important component of FIs’ balance sheets and because the assets used to secure such loans are immobile and susceptible to climate-related extreme weather events.
Content Type(s): Staff research, Staff discussion papers JEL Code(s): C, C8, C81, G, G2, G21, Q, Q5, Q54 Research Theme(s): Financial system, Financial stability and systemic risk, Household and business credit, Structural challenges, Climate change

Assessing Climate-Related Financial Risk: Guide to Implementation of Methods

Technical report No. 120 Hossein Hosseini Jebeli, Craig Johnston, Craig Logan, Miguel Molico, Xiangjin Shen, Marie-Christine Tremblay
A pilot project on climate transition scenarios by the Bank of Canada and the Office of the Superintendent of Financial Institutions assessed climate-related credit and market risks. This report describes the project’s methodologies and provides guidance on implementing them.
Content Type(s): Staff research, Technical reports JEL Code(s): C, C5, C53, C8, C83, G, G1, G3, G32 Research Theme(s): Financial system, Financial stability and systemic risk, Models and tools, Econometric, statistical and computational methods, Structural challenges, Climate change

Transition Scenarios for Analyzing Climate-Related Financial Risk

Staff discussion paper 2022-1 Y.-H. Henry Chen, Erik Ens, Olivier Gervais, Hossein Hosseini Jebeli, Craig Johnston, Serdar Kabaca, Miguel Molico, Sergey Paltsev, Alex Proulx, Argyn Toktamyssov
Climate transition scenarios clarify climate-related risks to our economy and financial system. This paper summarizes key results of Canada-relevant scenarios developed in a pilot project on climate risk by the Bank of Canada and the Office of the Superintendent of Financial Institutions.
Content Type(s): Staff research, Staff discussion papers JEL Code(s): C, C6, C68, D, D5, D58, E, E5, E50, O, O4, O44, P, P1, P18, Q, Q5, Q54 Research Theme(s): Financial system, Financial stability and systemic risk, Models and tools, Economic models, Structural challenges, Climate change

Short-Run Dynamics in a Search-Theoretic Model of Monetary Exchange

Staff working paper 2020-48 Jonathan Chiu, Miguel Molico
We study the short-run effects of monetary policy using a search-theoretic monetary model in which agents are subject to idiosyncratic shocks and aggregate monetary shocks.
Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, E40, E5, E50 Research Theme(s): Models and tools, Economic models, Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission, Monetary policy tools and implementation

On the Nexus of Monetary Policy and Financial Stability: Effectiveness of Macroprudential Tools in Building Resilience and Mitigating Financial Imbalances

Staff discussion paper 2016-11 H. Evren Damar, Miguel Molico
This paper reviews the Canadian and international evidence of the effectiveness of macroprudential policy measures in building resilience and mitigating financial imbalances. The analysis concludes that these measures have broadly achieved their goal of increasing the overall resilience of the financial system to the buildup of imbalances and increasing the financial system’s ability to withstand adverse shocks.
Content Type(s): Staff research, Staff discussion papers JEL Code(s): E, E5, E51, E58, G, G1, G18, G2, G28 Research Theme(s): Financial system, Financial stability and systemic risk, Financial system regulation and oversight, Household and business credit

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Bank publications

Bank of Canada Review articles

May 17, 2012

Conference Summary: New Developments in Payments and Settlement

Bank of Canada Review - Spring 2012 Ben Fung, Miguel Molico
The Bank of Canada’s annual conference, held in November 2011, brought together leading researchers from universities, central banks and other institutions from around the world. Divided into four sessions plus two keynote addresses, the conference covered such topics as the use of cash and other means of payment in retail transactions, large-value payments systems, and […]
Content Type(s): Publications, Bank of Canada Review articles JEL Code(s): E, E4, E42, G, G2, G28, L, L8, L81
November 17, 2011

Liquidity Provision and Collateral Haircuts in Payments Systems

Bank of Canada Review - Autumn 2011 James Chapman, Jonathan Chiu, Miguel Molico
Central banks play a pivotal role in well-functioning payments systems by providing liquidity via collateralized lending. This article discusses the role of collateral and haircut policy in central bank lending, as well as the distinguishing features of the central bank’s policy relative to private sector practices. It presents a model that explicitly incorporates the unique role of central banks in the payments system and argues that central banks must consider how their haircut policies affect the relative price and liquidity of assets, the market’s asset allocation, and the likelihood of participants to default. Furthermore, under extraordinary circumstances, there is a rationale for the central bank to temporarily reduce haircuts or broaden the list of eligible collateral to mitigate the shortage of liquidity in the market.
Content Type(s): Publications, Bank of Canada Review articles

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Financial System Hub articles

January 15, 2024

Flood risk and residential lending

Craig Johnston, Geneviève Vallée, Hossein Hosseini Jebeli, Miguel Molico, Marie-Christine Tremblay, Aidan Witts
We present key findings of a recent study that evaluates the credit risk that flooding poses to the residential lending activities of Canadian banks and credit unions. Results show that such risk currently appears modest but could become larger with climate change.
Content Type(s): Publications, Financial System Hub articles JEL Code(s): C, C8, C81, G, G2, G21, Q, Q5, Q54

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Financial System Review articles

Journal publications

Refereed Journal Articles