Are Hedge Funds a Hedge for Increasing Government Debt Issuance? Staff Discussion Paper 2025-7 Adam Epp, Jeffrey Gao This paper studies the rapid increase since 2019 of Government of Canada (GoC) debt issuance alongside greater hedge fund participation at GoC bond auctions. We find a systematic relationship between GoC debt stock and hedge fund bidding shares at auction. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Debt management, Financial institutions, Financial markets, Financial stability JEL Code(s): D, D4, D44, G, G1, G12, G2, G23, H, H6, H63
May 8, 2025 Release of the Financial Stability Report Opening statement Tiff Macklem, Carolyn Rogers Ottawa, Ontario Press conference following the release of the Financial Stability Report. Content Type(s): Press, Speeches and appearances, Opening statements Research Topic(s): Business fluctuations and cycles, Debt management, Financial institutions, Financial markets, Financial stability, Financial system regulation and policies, International financial markets, Recent economic and financial developments
March 17, 2025 Will asset managers dash for cash? A summary of the implications for central banks David Cimon, Jean-Philippe Dion, Jean-Sébastien Fontaine, Jabir Sandhu We consider ways central banks could adapt in the event of an increased risk of a dash for cash from asset managers. We explore ideas such as new facilities that ease asset managers’ ability to convert existing assets to cash or new assets with liquidity that central banks would guarantee. Content Type(s): Publications, Financial System Hub articles Research Topic(s): Central bank research, Coronavirus disease (COVID-19), Financial institutions, Financial markets, Financial stability, Financial system regulation and policies JEL Code(s): E, E5, E58, G, G0, G00, G01, G1, G2
Will Asset Managers Dash for Cash? Implications for Central Banks Staff Discussion Paper 2025-5 David Cimon, Jean-Philippe Dion, Jean-Sébastien Fontaine, Jabir Sandhu We consider ways central banks could adapt in the event of an increased risk of a dash for cash from asset managers. We explore ideas such as new facilities that ease asset managers’ ability to convert existing assets to cash or new assets with liquidity that central banks would guarantee. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Central bank research, Coronavirus disease (COVID-19), Financial institutions, Financial markets, Financial stability, Financial system regulation and policies JEL Code(s): E, E5, E58, G, G0, G00, G01, G1, G2
The Contingent Term Repo Facility: Lessons learned and an update Staff Analytical Note 2025-12 Jessie Ziqing Chen, Parnell Chu, Scott Kinnear In 2024, the Bank of Canada reviewed and updated its Contingent Term Repo Facility policy, incorporating lessons learned from the COVID-19 pandemic and other global market developments, such as the UK gilt crisis in September 2022. This paper accompanies the March 17, 2025, Contingent Term Repo Facility market notice and provides background information and further details about the design of the revised policy. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Central bank research, Financial stability, Lender of last resort JEL Code(s): E, E5, E58, F, F6, F68, G, G0, G01, G2, G23
Stress testing central counterparties for resolution planning Staff Analytical Note 2025-11 Katherine Brennan, Bo Young Chang, Alper Odabasioglu, Radoslav Raykov The Bank of Canada completed its first resolution plan for the Canadian Derivatives and Clearing Corporation (CDCC) in 2024. To estimate the resolution costs, we apply the extreme value theory method to simulate the credit losses that would result from extreme scenarios where multiple clearing members default at the same time. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Financial institutions, Financial markets, Financial stability, Financial system regulation and policies, Payment clearing and settlement systems JEL Code(s): G, G1, G17, G2, G23, G28
The Prudential Toolkit with Shadow Banking Staff Working Paper 2025-9 Kinda Hachem, Martin Kuncl 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. Content Type(s): Staff research, Staff working papers Research Topic(s): Financial institutions, Financial stability, Financial system regulation and policies JEL Code(s): D, D6, D62, E, E6, E61, G, G0, G01, G2, G21, G28
Effects of macroprudential policy announcements on perceptions of systemic risks Staff Analytical Note 2025-4 Thibaut Duprey, Victoria Fernandes, Kerem Tuzcuoglu, Ruhani Walia We introduce a history of macroprudential policy (MPP) events in Canada since the 1980s. We document the short-run effects of MPP announcements on market-based measures of systemic risk and find that MPPs can influence the market’s perception of large banks’ resilience. Content Type(s): Staff research, Staff analytical notes Research Topic(s): Econometric and statistical methods, Financial institutions, Financial stability, Financial system regulation and policies JEL Code(s): E, E5, E58, G, G2, G21, G28, G3, G32
January 16, 2025 Back to normal for the balance sheet Speech summary Toni Gravelle VersaFi (formerly Women in Capital Markets) Toronto, Ontario Deputy Governor Toni Gravelle provides an update on when quantitative tightening will end and explains how the Bank of Canada will manage its balance sheet going forward. Content Type(s): Press, Speeches and appearances, Speech summaries Research Topic(s): Financial institutions, Financial markets, Financial stability, Financial system regulation and policies, Market structure and pricing, Monetary policy implementation, Monetary policy transmission, Recent economic and financial developments
January 16, 2025 The end of quantitative tightening and what comes next Remarks Toni Gravelle VersaFi (formerly Women in Capital Markets) Toronto, Ontario Deputy Governor Toni Gravelle provides an update on when quantitative tightening will end and how the Bank of Canada will manage its balance sheet after that. Content Type(s): Press, Speeches and appearances, Remarks Research Topic(s): Financial institutions, Financial markets, Financial stability, Financial system regulation and policies, Market structure and pricing, Monetary policy implementation, Monetary policy transmission, Recent economic and financial developments