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.

Risk and State-Dependent Financial Frictions

Using a nonlinear New Keynesian model with a financial accelerator, we show that financial frictions generate large state-dependent amplification effects. Shocks propagate more strongly in periods of financial stress. We propose an endogenous regime-switching DSGE framework for efficient estimation and improved model fit.
Martin Harding
Martin Harding
Rafael Wouters
Rafael Wouters
August 9, 2022

A Horse Race of Monetary Policy Regimes: An Experimental Investigation

How should central banks design monetary policy in stable times and during recessions? We run a horse race between five monetary policy frameworks in an experimental laboratory to assess how well the different approaches can manage the public’s expectations and stabilize the economy.
Olena Kostyshyna
Olena Kostyshyna
Luba Petersen
Luba Petersen
Jing Yang
Jing Yang
July 15, 2022

Cyber Security and Ransomware in Financial Markets

We develop a principal-agent model of cyber-attacking with fee-paying clients who delegate security decisions to financial platforms. We derive testable implications about clients’ vulnerability to cyber attacks and about the fees charged.
Toni Ahnert
Toni Ahnert
Michael Brolley
Michael Brolley
David Cimon
David Cimon
Ryan Riordan
Ryan Riordan
July 14, 2022

International Transmission of Quantitative Easing Policies: Evidence from Canada

This paper examines the cross-border spillovers from major economies’ quantitative easing (QE) policies to their trading partners. We concentrate on spillovers from the US to Canada during the zero lower bound period when QE policies were actively used.
Serdar Kabaca
Serdar Kabaca
Kerem Tuzcuoglu
Kerem Tuzcuoglu
June 30, 2022

Quantum Monte Carlo for Economics: Stress Testing and Macroeconomic Deep Learning

Using the quantum Monte Carlo algorithm, we study whether quantum computing can improve the run time of economic applications and challenges in doing so. We apply the algorithm to two models: a stress testing bank model and a DSGE model solved with deep learning. We also present innovations in the algorithm and benchmark it to classical Monte Carlo.
Vladimir Skavysh
Vladimir Skavysh
Sofia Priazhkina
Sofia Priazhkina
Diego Guala
Diego Guala
Thomas Bromley
Thomas Bromley
June 28, 2022

Unregulated Lending, Mortgage Regulations and Monetary Policy

This paper evaluates the effectiveness of macroprudential policies when regulations are uneven across mortgage lender types. We look at credit tightening that results from macroprudential regulations and examine how much of it is counteracted by credit shifting to unregulated lenders. We also study the impact of monetary policy tightening when some lenders are unregulated.
Ugochi Emenogu
Ugochi Emenogu
Brian Peterson
Brian Peterson
June 27, 2022

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.

4th Bank of Canada FSRC Macro-Finance Conference

Conference held on May 17 and 18, 2021.
May 17, 2021

Financial Markets’ Response to COVID-19 Policy Interventions

Policy-makers reacted to the COVID-19 crisis through a variety of channels. This Systemic Risk Centre conference, co-organized with the Bank of Canada, focused on how financial markets responded to these policy initiatives and asked what we have learned for future interventions.
November 27, 2020

Debt Management Modelling Workshop

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

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

This program provides outstanding scholars with an opportunity to work at the Bank of Canada.