Research Field(s): Financial Economics Financial Institutions Financial Markets

Staff research

Hedge funds and bond market liquidity dynamics at the onset of the 2026 Middle East conflict

Staff analytical paper 2026-42 Vincent Meh, Jabir Sandhu, Andreas Uthemann
We investigate whether hedge funds contributed to Government of Canada bond market illiquidity at the onset of the Middle East war in early 2026. We find no evidence they did. Hedge funds remained active in primary auctions, while their secondary market trading remained broadly consistent with their usual relative-value strategies.
Content Type(s): Staff research, Staff analytical paper JEL Code(s): G, G0, G01, G1, G12, G14, G2, G23, G24 Research Theme(s): Financial markets and funds management, Funds management, Market functioning

The Boundaries of Bank Funding: The Case of Canadian Cash ETFs

Staff analytical paper 2026-32 Jean-Sébastien Fontaine, Vincent Meh, Jayden Plener
The rise and transformation of Canadian cash ETFs highlight that banking liquidity regulation affects more than bank resilience. By changing the relative attractiveness of deposits and securities, it can shape where asset managers allocate their cash across the financial system.
Content Type(s): Staff research, Staff analytical paper JEL Code(s): E, E4, E44, G, G1, G11, G18, G2, G23, G28 Research Theme(s): Financial markets and funds management, Funds management, Financial system, Financial institutions and intermediation

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