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2338
result(s)
Stressed but not Helpless: Strategic Behaviour of Banks Under Adverse Market Conditions
Staff Working Paper 2021-35
Grzegorz Halaj,
Sofia Priazhkina
Our stress-testing tool considers banks under stress that can strategically manage their balance sheets. Using confidential Canadian supervisory data, we assess whether bank behaviour to maximize shareholder value can amplify a hypothetical stress scenario.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Central bank research,
Economic models,
Financial institutions,
Financial stability,
Financial system regulation and policies
JEL Code(s):
C,
C6,
C63,
C7,
C72,
G,
G2,
G21
Sequencing Extended Monetary Policies at the Effective Lower Bound
Staff Discussion Paper 2021-10
Yang Zhang,
Lena Suchanek,
Jonathan Swarbrick,
Joel Wagner,
Tudor Schlanger
In this analysis, we use simulations in the Bank of Canada’s projection model—the Terms-of-Trade Economic Model—to consider a suite of extended monetary policies to support the economy following the COVID-19 crisis.
Content Type(s):
Staff research,
Staff discussion papers
Topic(s):
Coronavirus disease (COVID-19),
Monetary policy,
Monetary policy transmission
JEL Code(s):
E,
E3,
E4,
E5,
E52,
E58
The Side Effects of Safe Asset Creation
Staff Working Paper 2021-34
Sushant Acharya,
Keshav Dogra
The secular decline in real interest rates has created a challenge for monetary policy, now confronting the zero lower bound more often. An increase in the supply of safe assets reduces downward pressure on the natural interest rate. This allows monetary policy to reach price stability and full employment, but not without cost—permanently lower investment.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Fiscal policy,
Monetary policy implementation
JEL Code(s):
E,
E3,
E4,
E5,
G,
G1,
H,
H6
The Anatomy of Sentiment-Driven Fluctuations
Staff Working Paper 2021-33
Sushant Acharya,
Jess Benhabib,
Zhen Huo
We show that changes in sentiment that aren’t related to fundamentals can drive persistent macroeconomic fluctuations even when all economic agents are rational. Changes in sentiment can also affect how fundamental shocks affect macroeconomic outcomes.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Economic models
JEL Code(s):
E,
E2,
E20,
E3,
E32,
F,
F4,
F44
BoC–BoE Sovereign Default Database: What’s new in 2021?
Staff Analytical Note 2021-15
David Beers,
Elliot Jones,
Zacharie Quiviger,
John Walsh
The BoC–BoE database of sovereign debt defaults, published and updated annually by the Bank of Canada and the Bank of England, provides comprehensive estimates of stocks of government obligations in default.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Debt management,
Development economics,
Financial stability,
International financial markets
JEL Code(s):
F,
F3,
F34,
G,
G1,
G10,
G14,
G15
Small and smaller: How the economic outlook of small firms relates to size
Staff Analytical Note 2021-14
Chris D'Souza,
James Fudurich,
Farrukh Suvankulov
Firms with fewer than 100 workers employ about 65 percent of the total labour force in Canada. An online survey experiment was conducted with firms of this size in Canada in 2018–19. We compare the responses of small and micro firms to explore how their characteristics and economic outlooks relate to their size.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Business fluctuations and cycles,
Firm dynamics
JEL Code(s):
C,
C8,
C83,
D,
D2,
D22,
E,
E3,
E32
The Effects of Government Licensing on E-commerce: Evidence from Alibaba
Staff Working Paper 2021-32
Ginger Zhe Jin,
Zhentong Lu,
Xiaolu Zhou,
Chunxiao Li
How does government licensing affect selling on online platforms? We examine the impact of China’s 2015 Food Safety Law on sellers and buyers on Alibaba, the largest e-commerce platform in that country.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Market structure and pricing,
Recent economic and financial developments
JEL Code(s):
D,
D8,
D82,
K,
K2,
K23,
L,
L5,
L8,
L81
Analyzing supply and demand for business loans using microdata from the Senior Loan Officer Survey
Staff Analytical Note 2021-13
Dylan Hogg
Both supply and demand factors help determine the level of business lending in the economy, but most data show only their combined effect on prices and quantities. Using the Bank of Canada’s Senior Loan Officer Survey microdata on financial institutions’ lending conditions and demand, we separate supply from demand effects.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Credit and credit aggregates,
Financial institutions,
Financial stability
JEL Code(s):
D,
D2,
D22,
G,
G0,
G01,
G2
An Optimal Macroprudential Policy Mix for Segmented Credit Markets
Staff Working Paper 2021-31
Jelena Zivanovic
How can macroprudential policy and monetary policy stabilize segmented credit markets? Is there a trade-off between financial stability and price stability? I use a theoretical model to evaluate the performance of alternative policies and find the optimal mix of macroprudential and monetary policy in response to aggregate shocks.
Content Type(s):
Staff research,
Staff working papers
Topic(s):
Business fluctuations and cycles,
Credit and credit aggregates,
Credit risk management,
Financial stability,
Financial system regulation and policies
JEL Code(s):
E,
E3,
E30,
E4,
E44,
E5,
E50