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
Adrian Walton
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
Martin Kuncl
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
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
Stefano Battiston
Marco D’Errico
Grzegorz Halaj
Christoffer Kok
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
Thorsten Koeppl
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
Robert Clark
Brent Hickman
Eric Richert
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.