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3865 Results

Stablecoins and Their Risks to Financial Stability

Staff discussion paper 2022-20 Cameron MacDonald, Laura Zhao
What risks could stablecoins pose to the financial system? We argue that the stabilization mechanisms of stablecoins give rise to the risk of confidence runs, which can propagate to broader cryptoasset markets and the traditional financial sector. We also argue that stablecoins can contribute to financial stability risks by facilitating the buildup of leverage and liquidity mismatch in decentralized finance. Such risks cannot be addressed by ensuring the price stability of stablecoins alone. Finally, we explore the potential implications of stablecoins for the current system of bank-intermediated credit and for monetary policy.
December 15, 2016

Monitoring Shadow Banking in Canada: A Hybrid Approach

In Monitoring Shadow Banking in Canada: A Hybrid Approach, Bo Young Chang, Michael Januska, Gitanjali Kumar and André Usche discuss how lending that occurs outside the traditional banking system provides benefits to the economy but must be monitored carefully for potential financial sector vulnerabilities. They describe how the Bank defines and measures shadow banking and how it assesses vulnerabilities in the sector, using an approach that examines both markets and entities.

Content Type(s): Publications, Financial System Review articles JEL Code(s): G, G0, G01, G2, G23
October 8, 2010

Business Outlook Survey

A quarterly summary of interviews conducted by the Bank's regional offices with the senior management of about 100 firms.
April 7, 2006

Summary of Comments – 2006/07 Debt Strategy Consultations

In November 2005, officials from the Department of Finance and the Bank of Canada sought views from Government Securities Distributors and institutional investors on a number of issues related to the design and operation of domestic debt programs.

Markov‐Switching Three‐Pass Regression Filter

We introduce a new approach for the estimation of high-dimensional factor models with regime-switching factor loadings by extending the linear three-pass regression filter to settings where parameters can vary according to Markov processes.

The Effects of Inflation Targeting for Financial Development

Staff analytical note 2019-21 Geoffrey R. Dunbar, Amy (Qijia) Li
The adoption of inflation targeting (IT) by central banks leads to an increase of 10 to 20 percent in measures of financial development, with a lag. We also find evidence that the financial sector benefits of IT adoption were higher for early-adopting central banks.
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