BoC–BoE Sovereign Default Database: What’s new in 2025? Staff analytical note 2025-24 David Beers, Obiageri Ndukwe, Joe Berry The BoC–BoE database of sovereign debt defaults, published and updated annually by the Bank of Canada and the Bank of England, provides comprehensive estimates of stocks of government obligations in default. The 2025 edition highlights a decline in the US-dollar value of sovereign debt in default and provides more data about defaults on China’s official loans. Content Type(s): Staff research, Staff analytical notes JEL Code(s): F, F3, F34, G, G1, G10, G14, G15 Research Theme(s): Financial markets and funds management, Funds management, International markets and currencies, Financial system, Financial stability and systemic risk
Household balance sheets and mortgage payment shocks Staff analytical note 2025-23 Thomas Michael Pugh, Saarah Sheikh, Taylor Webley Household savings in Canada have increased significantly since 2019, especially among homeowners without a mortgage. We assess how savings buffers can mitigate households’ financial risk in relation to asset repricing, mortgage payment renewal and unemployment. Content Type(s): Staff research, Staff analytical notes JEL Code(s): D, D3, D31, E, E2, E21, G, G5, G51 Research Theme(s): Financial system, Financial stability and systemic risk, Household and business credit
The increasing role of hedge funds in Government of Canada bond auctions Staff analytical note 2025-22 Adam Epp, Jeffrey Gao We find that the rise in Government of Canada debt issuance correlates to growing participation of hedge funds in bond auctions since 2020. This increased participation supports the cost-effective distribution of Canada’s debt, but it also represents a potential vulnerability because hedge funds have a greater flight risk than other investor types. Content Type(s): Staff research, Staff analytical notes JEL Code(s): D, D4, D44, G, G1, G12, G2, G23, H, H6, H63 Research Theme(s): Financial markets and funds management, Funds management, Financial system, Financial institutions and intermediation, Financial stability and systemic risk
Simulating the Resilience of the Canadian Banking Sector Under Stress: An Update of the Bank of Canada’s Top-Down Solvency Assessment Tool Technical report No. 128 Omar Abdelrahman, David Xiao Chen, Cameron MacDonald, Adi Mordel, Guillaume Ouellet Leblanc We present a technical description of the Top-Down Solvency Assessment (TDSA) tool. As a solvency stress-testing tool, TDSA is used to assess the banking sector’s capital resilience to hypothetical future risk scenarios. Content Type(s): Staff research, Technical reports JEL Code(s): C, C2, C22, C5, C52, C53, G, G1, G17, G2, G21, G28 Research Theme(s): Financial system, Financial institutions and intermediation, Financial stability and systemic risk, Models and tools, Economic models
Financial Shocks and the Output Growth Distribution Staff working paper 2025-25 Francois-Michel Boire, Thibaut Duprey, Alexander Ueberfeldt This paper studies how financial shocks shape the distribution of output growth by introducing a quantile-augmented vector autoregression (QAVAR), which integrates quantile regressions into a structural VAR framework. The QAVAR preserves standard shock identification while delivering flexible, nonparametric forecasts of conditional moments and tail risk measures for gross domestic product. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C3, C32, C5, C53, E, E3, E32, E4, E44, G, G0, G01 Research Theme(s): Financial system, Financial stability and systemic risk, Models and tools, Econometric, statistical and computational methods, Monetary policy, Real economy and forecasting
Short-Run and Long-Run News: Evidence from Giant Commodity Discoveries Staff working paper 2025-24 Jean-Paul L’Huillier, Kirill Shakhnov, Laure Simon Our understanding of news shocks is, to a large extent, based on studies that focus empirically on short-run news. This paper brings new insights by analyzing the effects of giant commodity discoveries, which typically materialize over the longer run. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E23, F, F3, F4, Q, Q3, Q33 Research Theme(s): Financial system, Financial stability and systemic risk, Models and tools, Economic models, Monetary policy, Real economy and forecasting, Structural challenges, International trade, finance and competitiveness
How will mortgage payments change at renewal? An updated analysis Staff analytical note 2025-21 Claudia Godbout, Adam Su, Yang Xu We update an assessment of potential changes in payments that mortgage holders could face at renewal in 2025 and 2026. We use an enhanced dataset (RESL2) that provides a more accurate starting point for mortgage balances. Content Type(s): Staff research, Staff analytical notes JEL Code(s): D, D1, D12, D14, G, G2, G21, G28, R, R2, R20 Research Theme(s): Financial system, Financial stability and systemic risk, Household and business credit
The impact of trading flows on Government of Canada bond prices Staff analytical note 2025-20 Andreas Uthemann, Rishi Vala, Jun Yang Trading flows affect Government of Canada bond prices. Our estimates suggest a sale of 1% of the available supply of bonds typically lowers bond prices by 0.2%. From 2000 to 2025, demand from institutional investors, such as Canadian pension funds and foreign investors, explains 69% of quarterly price variation, with the remainder explained by changes in the supply of bonds. Content Type(s): Staff research, Staff analytical notes JEL Code(s): C, C0, C01, C3, C36, C5, C58, D, D5, D53, E, E6, E62, G, G1, G11, G12, G2, G23 Research Theme(s): Financial markets and funds management, Funds management, Market functioning, Financial system, Financial stability and systemic risk
Non-bank financial intermediation: Canada’s submission to the 2024 global monitoring report Staff analytical note 2025-19 Elba Gomez Navas Acevedo, Thomas Thorn We share insights about non-bank financial intermediation in Canada in 2023. These data were collected as part of the Bank of Canada’s contribution to the Financial Stability Board’s Global Monitoring Report on Non-Bank Financial Intermediation. Content Type(s): Staff research, Staff analytical notes JEL Code(s): G, G2, G21, G22, G23 Research Theme(s): Financial system, Financial institutions and intermediation, Financial stability and systemic risk
Examining the Links Between Firm Performance and Insolvency Staff discussion paper 2025-10 Dylan Hogg, Hossein Hosseini Jebeli Assessing insolvency dynamics is essential for evaluating the financial health of non-financial corporations and mitigating macroeconomic and financial stability risks. This study leverages a newly created Statistics Canada dataset linking insolvency records with firm-level financial data to develop a robust framework for monitoring insolvency risk Content Type(s): Staff research, Staff discussion papers JEL Code(s): D, D2, D22, G, G3, G33, L, L2, L20 Research Theme(s): Financial system, Financial stability and systemic risk, Household and business credit, Models and tools, Econometric, statistical and computational methods