Liquidity Usage and Payment Delay Estimates of the New Canadian High Value Payments System Staff discussion paper 2020-9 Francisco Rivadeneyra, Nellie Zhang As part of modernizing its core payments infrastructure, Canada will replace the Large Value Transfer System (LVTS) with a new Real-Time Gross Settlement (RTGS) system called Lynx. An important question for policy-makers is how Lynx should be designed. Content Type(s): Staff research, Staff discussion papers JEL Code(s): C, C5, E, E4, E42, E5, E58 Research Theme(s): Financial markets and funds management, Funds management, Money and payments, Payment and financial market infrastructures
Why Do Central Banks Make Public Announcements of Open Market Operations? Staff working paper 2020-35 Narayan Bulusu Central banks communicate the results of open market operations. This helps participants in financial markets more accurately estimate the prevailing demand and supply conditions in the market for overnight loans. Content Type(s): Staff research, Staff working papers JEL Code(s): D, D5, D52, E, E5, E58, G, G2, G21 Research Theme(s): Financial markets and funds management, Market functioning, Models and tools, Economic models, Monetary policy, Monetary policy tools and implementation, Money and payments, Payment and financial market infrastructures
2019 Cash Alternative Survey Results Staff discussion paper 2020-8 Kim Huynh, Gradon Nicholls, Mitchell Nicholson The role of cash in Canadians’ lives has been evolving, as innovations in digital payments have become more widely adopted over the past decade. We contribute to the Bank of Canada’s research on central bank digital currency by monitoring Canadians’ use of cash and their adoption of digital payment methods. Content Type(s): Staff research, Staff discussion papers JEL Code(s): C, C1, C12, C9, E, E4, O, O5, O51 Research Theme(s): Money and payments, Cash and bank notes, Digital assets and fintech
August 31, 2020 Research Update - August 2020 This monthly newsletter features the latest research publications by Bank of Canada economists including external publications and working papers published on the Bank of Canada’s website. Content Type(s): Staff research, Research newsletters
Monetary Policy and Cross-Border Interbank Market Fragmentation: Lessons from the Crisis Staff working paper 2020-34 Tobias Blattner, Jonathan Swarbrick We present a two-country model featuring risky lending and cross-border interbank market frictions. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, E44, E5, E52, F, F3, F32, F36 Research Theme(s): Financial markets and funds management, International markets and currencies, Financial system, Financial institutions and intermediation, Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation
Survival Analysis of Bank Note Circulation: Fitness, Network Structure and Machine Learning Staff working paper 2020-33 Diego Rojas, Juan Estrada, Kim Huynh, David T. Jacho-Chávez Using the Bank of Canada's Currency Information Management Strategy, we analyze the network structure traced by a bank note’s travel in circulation and find that the denomination of the bank note is important in our potential understanding of the demand and use of cash. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C5, C52, C6, C65, C8, C81, E, E4, E42, E5, E51 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Money and payments, Cash and bank notes
The Interplay of Financial Education, Financial Literacy, Financial Inclusion and Financial Stability: Any Lessons for the Current Big Tech Era? Staff working paper 2020-32 Nicole Jonker, Anneke Kosse The objective of this paper is twofold. First, we assess whether financial education might be a suitable tool to promote the financial inclusion opportunities that big techs provide. Second, we study how this potential financial inclusion could impact financial stability. Content Type(s): Staff research, Staff working papers JEL Code(s): D, D1, D14, D9, D91, D92, G, G2, G21, G23, O, O1, O16 Research Theme(s): Financial system, Financial stability and systemic risk, Money and payments, Digital assets and fintech
Sample Calibration of the Online CFM Survey Technical report No. 118 Marie-Hélène Felt, David Laferrière The Canadian Financial Monitor (CFM) survey uses non-probability sampling for data collection, so selection bias is likely. We outline methods for obtaining survey weights and discuss the conditions necessary for these weights to eliminate selection bias. We obtain calibration weights for the 2018 and 2019 online CFM samples. Content Type(s): Staff research, Technical reports JEL Code(s): C, C8, C81, C83 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Money and payments, Cash and bank notes, Retail payments
Strengthening Inflation Targeting: Review and Renewal Processes in Canada and Other Advanced Jurisdictions Staff discussion paper 2020-7 Robert Amano, Thomas J. Carter, Lawrence L. Schembri We summarize the review and renewal process at four central banks (Reserve Bank of New Zealand, Bank of England, Sveriges Riksbank and the US Federal Reserve Bank) and compare them with the process at the Bank of Canada, which has been well-established since 2001. Content Type(s): Staff research, Staff discussion papers JEL Code(s): E, E5, E52, E58 Research Theme(s): Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission
What COVID-19 revealed about the resilience of bond funds Staff analytical note 2020-18 Guillaume Ouellet Leblanc, Ryan Shotlander The liquidity management strategies of fund managers, supported by policy measures, have helped bond funds limit the increase in redemptions caused by COVID 19. This avoided further deterioration in liquidity in bond markets. Nevertheless, these funds were left with lower cash buffers, which could make them more vulnerable to additional large redemptions. Content Type(s): Staff research, Staff analytical notes JEL Code(s): G, G1, G2, G20, G23 Research Theme(s): Financial markets and funds management, Market functioning, Financial system, Financial institutions and intermediation, Financial stability and systemic risk