Financial System Research Centre

On this page we showcase our latest research and analysis, conferences and partnerships with researchers outside the Bank.

About the FSRC

The FSRC will advance high-quality financial system research in Canada to inform policy and improve the economic and financial well-being of Canadians. The Centre showcases the Bank’s latest financial system research and analysis, helping us to build partnerships with researchers outside the Bank. We will also host an annual conference highlighting financial system research from Canada and around the world, including our own research and the results of our joint research ventures.


Research

Our goal is to advance the understanding of the structure, function and evolution of the Canadian financial system. This is essential to the core functions of the Bank. Our in-depth research helps identify risks and shapes policy by addressing issues in financial markets, banking, payments systems and other matters in the financial system.

Contagion in Dealer Networks

Bond dealers form trading networks that connect investors who buy and sell. Following the release of economic data, these networks become larger to accommodate more trades. But there may be a trade-off. Large networks also suffer from contagion: in this case, a prevalence of investors experiencing delays receiving their bonds.
Jean-Sébastien Fontaine
Jean-Sébastien Fontaine
Adrian Walton
Adrian Walton
January 10, 2020

Loan Insurance, Market Liquidity, and Lending Standards

Governments often assume default risk at loan origination through various guarantees. In a simple model of lending with asymmetric information, we show that insurance against loan default lowers lending standards in primary markets but improves liquidity in secondary markets. A regulator can improve welfare by subsidizing loan insurance.
Toni Ahnert
Toni Ahnert
Martin Kuncl
Martin Kuncl
December 9, 2019

Extreme Downside Risk in Asset Returns

Financial markets can experience sudden and severe downward movements. This paper finds that investors demand a risk premium for holding securities that perform extremely badly in such downturns of the market.
Lerby Ergun
Lerby Ergun
December 6, 2019

Interconnected Banks and Systematically Important Exposures

Complex interconnections among banks may make the banking system more vulnerable to contagion risks. We find that when banks operate in multiple countries, the banking system is more resilient to small shocks but less resilient to large shocks.
Alan Roncoroni
Alan Roncoroni
Stefano Battiston
Stefano Battiston
Marco D’Errico
Marco D’Errico
Grzegorz Halaj
Grzegorz Halaj
Christoffer Kok
Christoffer Kok
November 20, 2019

The Economics of Cryptocurrencies – Bitcoin and Beyond

Since the creation of Bitcoin in 2009, over 2,000 cryptocurrencies have been issued. We evaluate how well a cryptocurrency functions as a payment system.
Jonathan Chiu
Jonathan Chiu
Thorsten Koeppl
Thorsten Koeppl
September 27, 2019

Resolving Failed Banks: Uncertainty, Multiple Bidding & Auction Design

Bank resolution is costly. Our study suggests that the Federal Deposit Insurance Corporation could reduce the cost of purchase and assumption transactions by removing uncertainty in their least-cost scoring rule.
Jason Allen
Jason Allen
Robert Clark
Robert Clark
Brent Hickman
Brent Hickman
Eric Richert
Eric Richert
August 23, 2019

Conferences

We regularly bring together researchers from academic and policy institutions at conferences that discuss financial system relevant topics such as banking regulation, housing markets, retail payments, and the next generation of central bank models.

Debt Management Modelling Workshop

The Bank of Canada is hosting a one-day workshop focusing on advances in models and frameworks for sovereign debt management.
April 24, 2020

Conference on the Economics of Central Bank Digital Currency

This two-day conference, jointly organized by the Bank of Canada and Sveriges Riksbank, was held in Ottawa, Ontario. The event provided a forum for central bankers and academic researchers to discuss arguments for and against the issuance of central bank digital currencies.
October 17, 2019

Joint Macroeconomic Workshop in Tokyo

The Bank of Canada, together with the Bank of Japan and the Federal Reserve Bank of Philadelphia, held the first joint workshop on macroeconomic issues for central banks. Participants discussed household inequality, labour-market dynamics, and monetary and fiscal policy.
September 27, 2019

External Partnerships

We value research partnerships and offer opportunities for experienced and promising researchers in a variety of fields.

External Academic Consultants

Academic consultants and researchers working with the Bank have access to some unique data sets and are often granted an individual-level view of household and business choices. Notable experts in the field have started to collaborate with our staff to explore these data sets. Evren Damar and Sebastien Bertermier share their experiences working with us.

PhD Internship Program

As a PhD student, you will spend two to four months pursuing your dissertation as well as presenting and promoting your research. Within this environment, you will find a wealth of opportunities to grow and build your professional expertise and network with fellow Bank researchers as well as external academics who visit regularly.

Visiting Scholar Program

Information on the Bank of Canada’s collaborative research program for outstanding scholars