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.

Learning, Equilibrium Trend, Cycle, and Spread in Bond Yields

This equilibrium model explains the trend in long-term yields and business-cycle movements in short-term yields and yield spreads. The less-frequent inverted yield curves (and less-frequent recessions) after the 1990s are due to recent secular stagnation and procyclical inflation expectations.
Guihai Zhao
Guihai Zhao
April 16, 2020

Optimal Taxation in Asset Markets with Adverse Selection

What is the optimal tax schedule in over-the-counter markets, e.g., those for corporate bonds? I find that an optimal tax schedule is often non-monotonic. For example, trading of some high-price assets should be subsidized, and trading of some low-price assets should be taxed.
Mohammad Davoodalhosseini
Mohammad Davoodalhosseini
April 6, 2020

Demand for Payment Services and Consumer Welfare: The Introduction of a Central Bank Digital Currency

Using a two-stage model, we study the determinants of Canadian consumers’ choices of payment method at the point of sale. We estimate consumer preferences and adoption costs for various combinations of payment methods. We analyze how introducing a central bank digital currency would affect the market equilibrium.
Kim Huynh
Kim Huynh
Jozsef Molnar
Jozsef Molnar
Oleksandr Shcherbakov
Oleksandr Shcherbakov
Qinghui Yu
Qinghui Yu
March 13, 2020

A Portfolio-Balance Model of Inflation and Yield Curve Determination

How does the supply of nominal government debt affect the macroeconomy? To answer this question, we propose a portfolio-balance model of the yield curve in which inflation is determined through an interest rate rule.
Antonio Diez de los Rios
Antonio Diez de los Rios
March 9, 2020

A Spatial Model of Bank Branches in Canada

Using data on bank branch locations across Canada from 2008 to 2018, we explore an interesting aspect of bank branch competition—geographic concentration. We find that bank branch density does not correlate with geographic and market concentration; however, we do find strong correlation with postal-code demographics.
Heng Chen
Heng Chen
Matthew Strathearn
Matthew Strathearn
February 6, 2020

Banking Regulation and Market Making

We model how securities dealers respond to regulations on leverage, position and liquidity such as those imposed by the Basel III framework. We show that while asset prices exhibit greater price impact, bid-ask spreads do not change and trading volumes may even increase.
David A. Cimon
David A. Cimon
Corey Garriott
Corey Garriott
February 16, 2017

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