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Mortgage debt represents over 70% of all Canadian household financial liabilities, and the performance of these debts is critical to the health of the financial system. We explore the relationships between mortgage arrears and key macroeconomic fundamentals such as labour market variables, interest rates, house prices and inflation. We then develop a framework to assess future household mortgage stress.

We develop an algorithm and run it on a hybrid quantum annealing solver to find an ordering of payments that reduces the amount of system liquidity necessary without substantially increasing payment delays.

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This article provides a broad perspective on the performance of the labour market in Canada and the United States since the Great Recession. It also presents a simple way to summarize much of this information in a single composite labour market indicator (LMI) for both countries. The LMI suggests that the unemployment rate in Canada has evolved largely in line with overall labour market conditions since the recession, but may have modestly overstated the extent of recent improvement. The U.S. unemployment rate, in contrast, appears to have substantially overstated the post-recession improvement in labour market conditions.

In 2024, the Canadian Overnight Repo Rate Average (CORRA) rose 7 basis points above the Bank of Canada’s target overnight rate as settlement balances declined and hedge fund borrowing increased by $30 billion, straining dealers’ balance sheets. Exercising market power, dealers raised rates, and as client activity grew, these higher rates increasingly influenced CORRAs deviation from target.

This paper theoretically and empirically examines the price impacts of liquidations in DeFi and how different liquidation mechanisms affect the price impacts.

Modeling and estimating persistent discrete data can be challenging. In this paper, we use an autoregressive panel probit model where the autocorrelation in the discrete variable is driven by the autocorrelation in the latent variable. In such a non-linear model, the autocorrelation in an unobserved variable results in an intractable likelihood containing high-dimensional integrals.

This note investigates the relationship between crude oil prices and investment in the energy sector. We employ a set of vector autoregression (VAR) models (unconstrained VAR, vector error-correction and Bayesian VAR) to formalize the relationship between the West Texas Intermediate (WTI) benchmark and fixed-asset cash spending in the oil and gas extraction and support activities sector of the Canadian economy.

Technological innovation in financial services could transform the financial system, Bank of Canada Senior Deputy Governor Carolyn Wilkins said today. But realizing the benefits of fintech, while guarding against the risks it could create, requires strong collaboration among actors in the financial system.

Cash is the preferred method of payment for small value transactions generally less than $25. We provide insight to this finding with a new theoretical model that characterizes and compares consumers’ costs of paying with cash to paying with cards for each transaction.