The Threat of Counterfeiting in Competitive Search Equilibrium Staff Working Paper 2013-22 Enchuan Shao Recent studies in monetary theory show that if buyers can use lotteries to signal the quality of bank notes, counterfeiting does not occur in a pooling equilibrium. In this paper, I investigate the robustness of this non-existence result by considering an alternative trading mechanism. Content Type(s): Staff research, Staff working papers Research Topic(s): Bank notes JEL Code(s): D, D8, D82, D83, E, E4, E42
Belief Dispersion and Order Submission Strategies in the Foreign Exchange Market Staff Working Paper 2011-8 Ingrid Lo, Stephen Sapp This paper empirically examines how dispersions across investors beliefs influence traders order submission decisions in the foreign exchange market. Previous research has found that dispersion in traders beliefs regarding future macroeconomic announcements has a significant impact on both price dynamics and trading volume before the announcements in the foreign exchange and other financial markets. Content Type(s): Staff research, Staff working papers Research Topic(s): Exchange rates, Market structure and pricing JEL Code(s): D, D4, G, G1
December 23, 2002 Financial Structure and Economic Growth: A Non-Technical Survey Financial System Review - December 2002 Veronika Dolar, Césaire Meh Content Type(s): Publications, Financial System Review articles
Should Banks Be Worried About Dividend Restrictions? Staff Working Paper 2023-49 Josef Schroth A regulator would want to restrict dividends to force banks to rebuild capital during a crisis. But such a policy is not time-consistent. A time-consistent policy would let banks gradually rebuild capital and pay dividends even when their equity remains below pre-crisis levels. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Credit and credit aggregates, Credit risk management, Financial stability, Financial system regulation and policies, Lender of last resort JEL Code(s): E, E1, E13, E3, E32, E4, E44
Macroprudential Policy with Capital Buffers Staff Working Paper 2019-8 Josef Schroth The countercyclical capital buffer is part of Basel III, the set of regulatory measures developed in response to the financial crisis of 2007–09. This study focuses on how time-varying capital buffers can address inefficiencies in economies with endogenous financial crises. Content Type(s): Staff research, Staff working papers Research Topic(s): Business fluctuations and cycles, Credit and credit aggregates, Credit risk management, Financial stability, Financial system regulation and policies, Lender of last resort JEL Code(s): E, E1, E13, E3, E32, E4, E44
Labour Supply and Firm Size Staff Working Paper 2023-47 Lin Shao, Faisal Sohail, Emircan Yurdagul This paper documents a systematic pattern of how wages, hours and their relationship vary across firms of different sizes. Using a model with heterogeneous firms and workers, we show how the interplay between wages, hours and firm size affect worker sorting and inequality. Content Type(s): Staff research, Staff working papers Research Topic(s): Firm dynamics, Labour markets JEL Code(s): E, E2, E24, J, J2, J3, J31
How Do Mortgage Rate Resets Affect Consumer Spending and Debt Repayment? Evidence from Canadian Consumers Staff Working Paper 2020-18 Katya Kartashova, Xiaoqing Zhou We study the causal effect of mortgage rate changes on consumer spending, debt repayment and defaults during an expansionary and a contractionary monetary policy episode in Canada. We find asymmetric responses of consumer durable spending, deleveraging and defaults. These findings help us to understand household sector response to interest rate changes. Content Type(s): Staff research, Staff working papers Research Topic(s): Credit and credit aggregates, Interest rates, Monetary policy, Monetary policy transmission JEL Code(s): D, D1, D12, D14, E, E4, E43, E5, E52, G, G2, G21, R, R3, R31
Monetary Policy Governance: Bank of Canada Practices to Support Policy Effectiveness Staff Discussion Paper 2024-14 Brigitte Desroches, Sharon Kozicki, Laure Simon We examine different monetary policy governance structures and discuss the important roles of non-legislated processes and practices. We also provide an update on monetary policy governance at the Bank of Canada and how it has evolved over time. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Credibility, Monetary policy communications, Monetary policy framework JEL Code(s): E, E0, E02, E5, E58
2013 Methods-of-Payment Survey Results Staff Discussion Paper 2015-4 Christopher Henry, Kim Huynh, Rallye Shen As the sole issuer of bank notes, the Bank of Canada conducts methods-of-payment (MOP) surveys to obtain a detailed and representative snapshot of Canadian payment choices, with a focus on cash usage. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Bank notes, Digital currencies and fintech JEL Code(s): E, E4
The Future Prospects for National Financial Markets and Trading Centres Staff Working Paper 2001-10 Charles Gaa, Stephen Lumpkin, Robert Ogrodnick, Peter Thurlow This paper investigates the effects of the continuation of globalization and technological developments on the future of national-level financial markets and trading centres, particularly in smaller countries such as Canada. We foresee the development of a single global market in the most-liquid assets based on equity-market linkages. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial markets JEL Code(s): G, G1, G10