Toni Gravelle was appointed Deputy Governor of the Bank of Canada, effective October 1, 2019. In this role, he oversees the Financial Markets Department (FMD) and the Banking and Payments Department, and is one of two Deputy Governors who oversee the Bank’s role in maintaining a stable and efficient financial system. As a member of the Bank’s Governing Council, he also shares responsibility for decisions about monetary policy and for setting the strategic direction of the Bank.
Mr. Gravelle first joined the Bank in 1996 as an analyst in FMD and went on to hold increasingly senior positions. He became Deputy Managing Director of the Financial Stability Department in 2008 and held that position until 2013, when he was seconded to the Department of Finance Canada. He returned to the Bank in 2015 when he was appointed Managing Director of FMD.
Along with his expertise in Canada’s financial sector, Mr. Gravelle brings international experience to the Bank. From 2002 to 2005, he was an economist at the International Monetary Fund (IMF), where he helped assess the stability of financial systems in France and Senegal and contributed to the IMF’s semi-annual Global Financial Stability Report.
Mr. Gravelle is a native of Corbeil, Ontario, and holds a PhD in economics from Western University.
Deputy Governor Toni Gravelle discusses actions taken by the Bank of Canada to respond to market-wide stresses during the COVID-19 pandemic and the Bank’s role as lender of last resort in the financial system.
Deputy Governor Toni Gravelle discusses the Bank’s latest interest rate announcement and explains how efforts to keep financial markets functioning through the COVID-19 crisis will lay a solid foundation for economic recovery
At the onset of the pandemic, the Bank of Canada transitioned its framework for monetary policy implementation from a corridor system to a floor system, which it has since decided to maintain. We provide a comprehensive analysis of both frameworks and assess their relative merits based on five key criteria that define a sound framework.
To investigate the extent to which the transparency of the Bank of Canada's monetary policy has improved, the authors examine empirically – over the period 30 October 2000 to 31 May 2007 – the reaction of Canadian financial markets to official Bank communications, and in particular their reaction to the recent inclusion of forward-looking policy-rate guidance in these communications.
The authors present a detailed discussion of the Bank of Canada's framework for the implementation of monetary policy. As background, they provide a brief overview of the financial system in Canada, including a discussion of the financial services industry and the money market.
In this paper, we define a financial institution’s contribution to financial systemic risk as the increase in financial systemic risk conditional on the crash of the financial institution. The higher the contribution is, the more systemically important is the institution for the system.
The authors develop a new methodology to investigate how crises cause the relationship between financial variables to change. Two possible sources of increased co-movement between markets during high-variance episodes are considered: larger common shocks operating through standard market linkages, and a structural change in the propagation of shocks between markets, called "shift contagion."
Although dealership government and equity securities have, on the surface, similar market structures, the author demonstrates that some subtle differences exist between them that are likely to significantly affect the way market-makers trade, and as such have an impact on the liquidity that they provide.
In this study we statistically quantify the reactions of Canadian and U.S. interest rates to macroeconomic announcements released in Canada and in the United States. We find that Canadian interest rates react very little to Canadian macroeconomic news and are significantly affected by U.S. macroeconomic news, which indicates that international influences on the Canadian fixed-income markets are important.
The aims of this study are to examine how liquidity in the Government of Canada securities market has evolved over the 1990s and to determine what factors influence the level of liquidity in this market, with some comparisons to the U.S. Treasury securities market. We find empirical support for the hypothesis that an increase in […]
With the elimination of the federal deficit, the Bank of Canada, the Department of Finance, and financial market participants are examining ways to manage the reduction in the stock of marketable debt. This paper summarizes three different methods—reverse auction, over-the-counter purchases, and conversions—that could be used to buy back Government of Canada bonds before they […]
Central banks continuously strive to improve how they communicate to financial markets and the public in order to increase transparency. For this reason, many central banks have begun to include guidance on the policy rate in the form of forward-looking statements in their communications. This article examines the debate over the usefulness of providing such statements from both theoretical and empirical standpoints. The evidence presented here suggests that the use of forward-looking statements in Bank of Canada communications has made the Bank more predictable, but not necessarily more transparent.
At this 2006 workshop hosted by the Bank of Canada, an international group of market participants, regulators, and policy-makers gathered to assess recent developments in the derivatives market. Among the topics discussed were the recent prodigious growth in risk-transfer instruments, including credit derivatives and inflation-linked derivatives, as well as the accompanying challenges and benefits. Overall, the development of derivatives markets was seen as providing broad economic benefits, including more complete financial markets, improved market liquidity, and increased capacity of the financial system to effectively price and bear risk. Yet concern was also voiced that market participants do not fully understand the risks that arise in trading credit derivatives.
In this article, the author reviews the factors behind the recent evolution of liquidity in the market for Government of Canada (GoC) securities. He finds that liquidity has been supported by changes in the structure of the market, notably the introduction and increasing size of benchmark bond issues. He also notes that while the GoC bond market has generally benefited from changes in market structure, liquidity in the treasury bill market has decreased since the mid-1990s, largely because of the declining supply of these securities.
This article also presents some comparisons of liquidity in the government securities markets of other industrialized countries and finds that liquidity in the Canadian market appears to compare favourably with all but the large U.S. Treasury market.
When the COVID-19 pandemic hit Canada, the Bank of Canada acted quickly. We needed to make sure the financial system worked well enough that credit could continue to flow. That meant addressing shortages of liquidity in financial markets—the backbone for lending and borrowing in the economy.