The Bank of Canada’s 2009 Methods-of-Payment Survey: Methodology and Key Results Staff Discussion Paper 2012-6 Carlos Arango, Angelika Welte The authors present the methodology and main findings of the Bank of Canada’s 2009 Methods-of-Payment survey, a detailed investigation of consumer payment behaviour in Canada. The survey targeted the 18- to 75-year-old Canadian resident population. Content Type(s): Staff research, Staff discussion papers Topic(s): Bank notes, Financial services, Payment clearing and settlement systems JEL Code(s): E, E4
On the Existence and Fragility of Repo Markets Staff Working Paper 2012-17 Hajime Tomura This paper presents a model of an over-the-counter bond market in which bond dealers and cash investors arrange repurchase agreements (repos) endogenously. Content Type(s): Staff research, Staff working papers Topic(s): Financial markets, Financial stability, Payment clearing and settlement systems JEL Code(s): G, G2, G24
Estimating the Demand for Settlement Balances in the Canadian Large Value Transfer System Staff Working Paper 2012-15 Nellie Zhang This paper applies a static model of an interest rate corridor to the Canadian data, and estimates the aggregate demand for central-bank settlement balances in the Large Value Transfer System (LVTS). Content Type(s): Staff research, Staff working papers Topic(s): Interest rates, Monetary policy implementation, Payment clearing and settlement systems JEL Code(s): C, C3, C36, E, E4, E40, E5, E50, G, G0, G01
May 17, 2012 Conference Summary: New Developments in Payments and Settlement Bank of Canada Review - Spring 2012 Ben Fung, Miguel Molico The Bank of Canada’s annual conference, held in November 2011, brought together leading researchers from universities, central banks and other institutions from around the world. Divided into four sessions plus two keynote addresses, the conference covered such topics as the use of cash and other means of payment in retail transactions, large-value payments systems, and […] Content Type(s): Publications, Bank of Canada Review articles Topic(s): Bank notes, Central bank research, Financial system regulation and policies, Monetary policy implementation, Payment clearing and settlement systems JEL Code(s): E, E4, E42, G, G2, G28, L, L8, L81
The Impact of Retail Payment Innovations on Cash Usage Staff Working Paper 2012-14 Ben Fung, Kim Huynh, Leonard Sabetti Many predict that innovations in retail payment may render cash obsolete. We investigate this possibility in the context of recent payment innovations such as contactless-credit and stored-value cards. Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, Financial services, Payment clearing and settlement systems JEL Code(s): C, C3, C35, C8, C83, E, E4, E41
A Note on Central Counterparties in Repo Markets Staff Discussion Paper 2012-4 Hajime Tomura The author introduces a central counterparty (CCP) into a model of a repo market. Without the CCP, there exist multiple equilibria in the model. In one of the equilibria, a repo market emerges as bond dealers and cash investors choose to arrange repos in an over-the-counter bond market. Content Type(s): Staff research, Staff discussion papers Topic(s): Financial markets, Financial stability, Payment clearing and settlement systems JEL Code(s): G, G2, G24
November 17, 2011 Liquidity Provision and Collateral Haircuts in Payments Systems Bank of Canada Review - Autumn 2011 James Chapman, Jonathan Chiu, Miguel Molico Central banks play a pivotal role in well-functioning payments systems by providing liquidity via collateralized lending. This article discusses the role of collateral and haircut policy in central bank lending, as well as the distinguishing features of the central bank’s policy relative to private sector practices. It presents a model that explicitly incorporates the unique role of central banks in the payments system and argues that central banks must consider how their haircut policies affect the relative price and liquidity of assets, the market’s asset allocation, and the likelihood of participants to default. Furthermore, under extraordinary circumstances, there is a rationale for the central bank to temporarily reduce haircuts or broaden the list of eligible collateral to mitigate the shortage of liquidity in the market. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Central bank research, Financial stability, Payment clearing and settlement systems
Analyzing Default Risk and Liquidity Demand during a Financial Crisis: The Case of Canada Staff Working Paper 2011-17 Jason Allen, Ali Hortaçsu, Jakub Kastl This paper explores the reliability of using prices of credit default swap contracts (CDS) as indicators of default probabilities during the 2007/2008 financial crisis. Content Type(s): Staff research, Staff working papers Topic(s): Financial institutions, Financial markets, Payment clearing and settlement systems JEL Code(s): E, E4, E42, E5, E58, G, G0, G01, G2, G28
The Impact of Operational Events on the Network Structure of the LVTS Staff Discussion Paper 2011-7 Tom Roberts The author uses a quantitative network analysis approach to assess how participants in the Large Value Transfer System (LVTS) respond to partial outages at other banks. Content Type(s): Staff research, Staff discussion papers Topic(s): Payment clearing and settlement systems JEL Code(s): C, C4, C49, G, G1, G14, G2, G21
Lessons from International Central Counterparties: Benchmarking and Analysis Staff Discussion Paper 2011-4 Alexandre Lazarow Since the financial crisis, attention has focused on central counterparties (CCPs) as a solution to systemic risk for a variety of financial markets, ranging from repurchase agreements and options to swaps. Content Type(s): Staff research, Staff discussion papers Topic(s): Financial markets, Financial stability, Financial system regulation and policies, Payment clearing and settlement systems JEL Code(s): G, G0, G01, G1, G14, G18, G2, G28, G3, G38