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220
result(s)
Fixed-income dealing and central bank interventions
Staff Analytical Note 2022-9
David Cimon,
Adrian Walton
We summarize the theoretical model of central bank asset purchases developed in Cimon and Walton (2022). The model helps us understand how asset purchases ease pressures on investment dealers to restore market conditions in a crisis.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Coronavirus disease (COVID-19),
Economic models,
Financial institutions,
Financial markets,
Market structure and pricing
JEL Code(s):
G,
G1,
G10,
G2,
G20,
L,
L1,
L10
Potential netting benefits from expanded central clearing in Canada’s fixed-income market
Staff Analytical Note 2022-8
Jessie Ziqing Chen,
Johannes Chen,
Shamarthi Ghosh,
Manu Pandey,
Adrian Walton
We assess whether more central clearing would enhance the resilience of Canadian fixed-income markets. Our analysis estimates the potential benefits of balance sheet netting under scenarios where central clearing is expanded to new participants.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Credit risk management,
Financial institutions,
Financial markets
JEL Code(s):
D,
D4,
G,
G1,
G12,
G2,
G21,
G29
Analyzing the house price boom in the suburbs of Canada’s major cities during the pandemic
Staff Analytical Note 2022-7
Louis Morel
We assess how location affects house prices in Canada. The gap in prices between suburbs and downtown was closing gradually before the pandemic. The gap has been closing faster since spring 2020. This finding reflects a shift in preferences toward more living space.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Asset pricing,
Coronavirus disease (COVID-19),
Financial stability,
Housing
JEL Code(s):
R,
R2,
R21,
R23,
R3,
R32
How well can large banks in Canada withstand a severe economic downturn?
Staff Analytical Note 2022-6
Andisheh (Andy) Danaee,
Harsimran Grewal,
Brad Howell,
Guillaume Ouellet Leblanc,
Xuezhi Liu,
Mayur Patel,
Xiangjin Shen
We examine the potential impacts of a severe economic shock on the resilience of major banks in Canada. We find these banks would suffer significant financial losses but nevertheless remain resilient. This underscores the role well-capitalized banks and sound underwriting practices play in supporting economic activity in a downturn.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Financial institutions,
Financial stability
JEL Code(s):
E,
E2,
E27,
E3,
E37,
E4,
E44,
G,
G1,
G2,
G21,
G23
Resilience of bank liquidity ratios in the presence of a central bank digital currency
Staff Analytical Note 2022-5
Alissa Gorelova,
Bena Lands,
Maria teNyenhuis
Could Canadian banks continue to meet their regulatory liquidity requirements after the introduction of a cash-like retail central bank digital currency (CBDC)? We conduct a hypothetical exercise to estimate how a CBDC could affect bank liquidity by increasing the run-off rates of transactional retail deposits under four increasingly severe scenarios.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Central bank research,
Digital currencies and fintech,
Econometric and statistical methods,
Financial institutions,
Financial stability
JEL Code(s):
C,
E,
E4,
G,
G2,
G21,
O,
O3,
O33
Assessing global potential output growth and the US neutral rate: April 2022
Staff Analytical Note 2022-4
Kyle Boutilier,
Thomas J. Carter,
Xin Scott Chen,
Eshini Ekanayake,
Louis Poirier,
Peter Shannon,
Akash Uppal,
Lin Xiang
We expect global potential output growth to increase from 2.7% in 2021 to 2.9% by 2024. Compared with the April 2021 assessment, global potential output growth is marginally slower. The current range for the US neutral rate is 2% to 3%, 0.25 percentage points higher than staff’s last assessment.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Interest rates,
Monetary policy,
Potential output,
Productivity
JEL Code(s):
E,
E1,
E2,
E4,
E5,
F,
F0,
O,
O4
Potential output and the neutral rate in Canada: 2022 reassessment
Staff Analytical Note 2022-3
Guyllaume Faucher,
Christopher Hajzler,
Martin Kuncl,
Dmitry Matveev,
Youngmin Park,
Temel Taskin
We expect potential output growth to be lower in 2021 than anticipated in the April 2021 assessment. By 2025, growth is expected to reach 2.3%. We assess that the Canadian nominal neutral rate increased slightly to lie in the range of 2.00% to 3.00%.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Economic models,
Interest rates,
Labour markets,
Monetary policy,
Potential output,
Productivity
JEL Code(s):
E,
E2,
E3,
E4,
E5
Benchmarks for assessing labour market health
Staff Analytical Note 2022-2
Erik Ens,
Corinne Luu,
Kurt See,
Shu Lin Wee
We propose a range of benchmarks for assessing labour market strength for monetary policy. This work builds on a previous framework that considers how diverse and segmented the labour market is. We apply these benchmarks to the Canadian labour market and find that it has more than recovered from the COVID-19 shock.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Business fluctuations and cycles,
Coronavirus disease (COVID-19),
Econometric and statistical methods,
Labour markets,
Monetary policy
JEL Code(s):
E,
E2,
E24,
J,
J2,
J21,
J6
Housing demand in Canada: A novel approach to classifying mortgaged homebuyers
Staff Analytical Note 2022-1
Mikael Khan,
Yang Xu
We introduce a novel approach to categorize mortgaged homebuyers into first-time homebuyers, repeat homebuyers and investors. We show how these groups contribute to activity in Canadian housing markets, and we analyze the differences in their demographic and financial characteristics.
Content Type(s):
Staff research,
Staff analytical notes
Topic(s):
Financial stability,
Housing
JEL Code(s):
R,
R2,
R21,
R3,
R31