Xuezhi Liu is a Senior Economist in the Financial Stability Department at the Bank of Canada. His work focuses on the assessment of vulnerabilities and risks in the Canadian financial system and the associated prudential policies. Prior to joining the Bank, Mr. Liu worked in the financial risk department of a major Canadian financial institution in Toronto. He obtained an Honors Bachelor of Arts degree in Economics and a Master of Science degree in Applied Mathematics, both from the University of Western Ontario.
Staff analytical notes
A retail central bank digital currency denominated in Canadian dollars could, in theory, create competition for bank deposit funding.
The stability of the Canadian financial system, as well as its ability to support the Canadian economy, depends on the ability of financial institutions to absorb and manage major shocks. This is especially true for large banks, which perform services essential to the Canadian economy.
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.
Staff discussion papers
One way of internalizing the externalities that each individual bank imposes on the rest of the financial system is to impose capital surcharges on them in line with their systemic importance.
Financial System Hub articles
November 14, 2018
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.
Financial System Review articles
- "Introducing funding liquidity risk in a macro stress-testing framework."
(with Céline Gauthier and Moez Souissi). International Journal of Central Banking 10.4 (2014): 105-141.
- "What Matters in Determining Capital Surcharge for Systemically Important Financial Institutions?."
(with Céline Gauthier, Toni Gravelle and Moez Souissi). In Simulation in Computational Finance and Economics: Tools and Emerging Applications. IGI Global, (2013): 211-224.