Vulnerabilities in Defined-Benefit Pension Plans Staff Discussion Paper 2007-3 Jack Selody An effective pension system enhances economic and financial efficiency. A majority of pension plans in Canada are defined-benefit (DB) plans, but DB plans are under stress from increasing longevity, low long-term interest rates, and the shrinking equity premium. DB plans are vulnerable to such shocks because they are complex financial vehicles, with interdependencies not fully […] Content Type(s): Staff research, Staff discussion papers Research Topic(s): Financial institutions JEL Code(s): G, G2, G23
Implications of New Accounting Standards for the Bank of Canada's Balance Sheet Staff Discussion Paper 2007-2 Mark Zelmer, Grahame Johnson The Canadian Institute of Chartered Accountants (CICA) has implemented new accounting standards for the valuation and reporting of financial instruments. They are effective for the Bank of Canada in 2007. As a result of these changes, the Bank has begun valuing its holdings of Government of Canada treasury bills on a fair value basis and […] Content Type(s): Staff research, Staff discussion papers Research Topic(s): Financial institutions, Monetary policy framework JEL Code(s): E, E5, E58, M, M4
The Zero Bound on Nominal Interest Rates: Implications for the Optimal Monetary Policy in Canada Staff Discussion Paper 2007-1 Claude Lavoie, Hope Pioro The authors assess the performance of the Canadian economy under a variety of interest rate rules when the zero bound on nominal interest rates can bind. Their assessment is based on numerical simulations of a dynamic stochastic general-equilibrium model in a stochastic environment. Consistent with the literature, the authors find that the probability and consequences […] Content Type(s): Staff research, Staff discussion papers Research Topic(s): Inflation: costs and benefits, Interest rates, Monetary policy framework JEL Code(s): E, E4, E43, E47, E5, E52