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.

The Financial Origins of Non-fundamental Risk

We explore the idea that the financial sector can be a source of non-fundamental risk to the rest of the economy. We also consider whether policy can be used to reduce this risk—either by increasing the supply of publicly backed safe assets or by reducing the demand for safe assets.
Sushant Acharya
Sushant Acharya
Keshav Dogra
Keshav Dogra
Sanjay Singh
Sanjay Singh
January 14, 2022

The Countercyclical Capital Buffer and International Bank Lending: Evidence from Canada

We examine the impact of the CCyB on foreign lending activities of Canadian banks. We show that the announcement of a tightening in another country’s CCyB leads to a decrease in the growth rate of cross-border lending between Canadian banks and borrowers in that other country.
David Xiao Chen
David Xiao Chen
Christian Friedrich
Christian Friedrich
November 29, 2021

Democratic Political Economy of Financial Regulation

We offer a theory of how inefficiently lax financial regulation could arise in a democratic society.
Igor Livshits
Igor Livshits
Youngmin Park
Youngmin Park
November 26, 2021

Are Bank Bailouts Welfare Improving?

Financial sector bailouts, while potentially beneficial during a crisis, might lead to excessive risk taking if anticipated. Taking expectations and aggregate risk implications into account, we show that bailouts can be welfare improving, but only if capital adequacy constraints are sufficiently tight.
Malik Shukayev
Malik Shukayev
Alexander Ueberfeldt
Alexander Ueberfeldt
November 9, 2021

More Money for Some: The Redistributive Effects of Open Market Operations

I use a search-theoretic model of money to study how open market operations affect the conduct of monetary policy and what this means for households along the wealth distribution. In the model, households vary in the size and composition of their portfolios, which in turn implies that they may be unevenly affected by open market operations.
Christian Bustamante
Christian Bustamante
September 29, 2021

Stressed but not Helpless: Strategic Behaviour of Banks Under Adverse Market Conditions

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.
Grzegorz Halaj
Grzegorz Halaj
Sofia Priazhkina
Sofia Priazhkina
July 20, 2021

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.