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A stable and efficient financial system is essential for sustaining economic growth and raising living standards. In our Financial System Review, we identify the main vulnerabilities and risks in the financial system in Canada and explain how they have evolved over the past year.

The global economy has continued to grow at a robust pace since the July Monetary Policy Report Update.

The process that the Bank of Canada follows to make its monetary policy decisions has evolved over time. This process is very information-intensive and collaborative, drawing on the expertise, judgment and analysis of many people. This article describes monetary policy decision making at the Bank, and discusses some common misconceptions about monetary policy and the process.

This 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.

The Bank projects that growth in the Canadian economy will accelerate from 1.6 percent this year to 2 percent in 2021.

The Annual Report outlines the Bank’s activities and achievements in 2017. It includes the financial statements and a message from Governor Stephen S. Poloz.

This issue includes analysis of the unconventional monetary policies recently implemented by central banks, and also presents Bank research in two areas - the migration of labour between economic regions in Canada, and the asset-allocation and funding decisions for Canada’s foreign exchange reserves.

I investigate how monetary policy transmits to mortgage rates via the mortgage market concentration channel for both traditional and shadow banks in the United States from 2009 to 2019. On average, shadow and traditional banks exhibit only a slight disparity in transmitting monetary shocks to mortgage rates.

Central banks continuously strive to improve how they communicate to financial markets and the public in order to increase transparency. For this reason, many central banks have begun to include guidance on the policy rate in the form of forward-looking statements in their communications. This article examines the debate over the usefulness of providing such statements from both theoretical and empirical standpoints. The evidence presented here suggests that the use of forward-looking statements in Bank of Canada communications has made the Bank more predictable, but not necessarily more transparent.

The Bank’s outlook for inflation and overall economic activity in Canada to the end of 2002 has not changed fundamentally from that presented in the May Monetary Policy Report.