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Can regulators keep pace with banks’ creative regulatory workarounds? Our analysis unpacks the trade-offs between fixed regulations and crisis-triggered rules, showing that the latter are especially prone to circumvention—and can trigger larger, costlier bailouts.

In April 1998, the Bank of Canada conducted its triennial survey of activity in the Canadian foreign exchange and derivatives markets. This was part of a coordinated international effort in which 43 countries carried out similar surveys. The foreign exchange market in Canada is the 11th largest in the world, and the Canadian dollar is the 7th most-traded currency globally. The average daily turnover of traditional foreign exchange transactions has grown by 23 per cent (to US$37 billion) since the last survey in 1995. Although this growth was substantial, the rate of increase has declined steadily since the survey began in 1983. The average daily turnover for single-currency interest rate derivatives during April 1998 was US$6.4 billion, an increase of 48 per cent over the previous survey.

This paper considers an economy where central-bank-issued fiat money competes with privately issued e-money. We study a policy-setting game between the central bank and the e-money issuer and find (1) the optimal monetary policy of the central bank depends on the policy of the private issuer and may deviate from the Friedman rule; (2) multiple equilibria may exist; (3) when the economy approaches a cashless state, the central bank’s optimal policy improves the market power of the e-money issuer and can lead to a discrete decrease in welfare and a discrete increase in inflation; and (4) first best cannot be achieved.

Growth in Canada’s economy is expected to reach 1.4 per cent this year and accelerate to 2.4 per cent in 2017.

Product standards are omnipresent in industrialized societies. Though standardization can be beneficial for domestic producers, divergent product standards have been categorized as a major obstacle to international trade. This paper quantifies the effect of standard harmonization on trade flows and characterizes the extent to which it changes the cost and demand structure of exporting.

The Canadian economy continues to adjust to major global developments.

Global economic growth has been somewhat stronger than projected, with momentum in emerging-market economies increasing noticeably.

Access notes on banking and financial statistics for chartered bank activity since 1990.

Since 2004, the Bank of Canada has carried out a qualitative annual survey to assess the degree of activity in Canadian foreign exchange (FX) hedging.