Regulatory Constraints on Bank Leverage: Issues and Lessons from the Canadian Experience Staff Discussion Paper 2009-15 Étienne Bordeleau, Allan Crawford, Christopher Graham The Basel capital framework plays an important role in risk management by linking a bank's minimum capital requirements to the riskiness of its assets. Nevertheless, the risk estimates underlying these calculations may be imperfect, and it appears that a cyclical bias in measures of risk-adjusted capital contributed to procyclical increases in global leverage prior to the recent financial crisis. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Financial institutions, Financial stability, Financial system regulation and policies JEL Code(s): G, G0, G01, G2, G21, G28
Market Timing of Long-Term Debt Issuance Staff Discussion Paper 2009-14 Jonathan Witmer The literature on market timing of long-term debt issuance yields mixed evidence that managers can successfully time their debt-maturity issuance. The early results that are indicative of debt-maturity timing are not robust to accounting for structural breaks or to other measures of debt maturity from firm-level data that account for call and put provisions in […] Content Type(s): Staff research, Staff discussion papers Research Topic(s): Financial markets, International topics JEL Code(s): G, G3, G30, G38
Network Analysis and Canada's Large Value Transfer System Staff Discussion Paper 2009-13 Lana Embree, Tom Roberts Analysis of the characteristics and structure of a network of financial institutions can provide insight into the complex relationships and interdependencies that exist in a payment, clearing, and settlement system (PCSS), and allow an intuitive understanding of the PCSS's efficiency, stability, and resiliency. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Financial stability, Payment clearing and settlement systems JEL Code(s): D, D8, D85, G, G1, G10
Measures of Aggregate Credit Conditions and Their Potential Use by Central Banks Staff Discussion Paper 2009-12 Alejandro García, Andrei Prokopiw Understanding the nature of credit risk has important implications for financial stability. Since authorities – notably, central banks – focus on risks that have systemic implications, it is crucial to develop ways to measure these risks. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Credit and credit aggregates, Financial markets, Financial stability JEL Code(s): G, G1, G10, G12, G13
A Financial Conditions Index for the United States Staff Discussion Paper 2009-11 Kimberly Beaton, René Lalonde, Corinne Luu The financial crisis of 2007–09 has highlighted the importance of developments in financial conditions for real economic activity. The authors estimate the effect of current and past shocks to financial variables on U.S. GDP growth by constructing two growthbased financial conditions indexes (FCIs) that measure the contribution to quarterly (annualized) GDP growth from financial conditions. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Business fluctuations and cycles, Monetary and financial indicators, Monetary conditions index, Recent economic and financial developments JEL Code(s): E, E3, E32, E4, E44, E47, E5, E51
Strengthening IMF Surveillance: An Assessment of Recent Reforms Staff Discussion Paper 2009-10 Robert Lavigne, Lawrence L. Schembri The authors assess the potential impact of recently approved reforms to International Monetary Fund (IMF) surveillance; namely, the "2007 Decision on Bilateral Surveillance Over Members' Policies" and the "Statement of Surveillance Priorities" (SSP). They conclude that these complementary reforms have the potential to create a comprehensive and coherent framework for IMF surveillance. If implemented properly, […] Content Type(s): Staff research, Staff discussion papers Research Topic(s): International topics JEL Code(s): F, F3, F33
The Outlook for the Global Supply of Oil: Running on Faith? Staff Discussion Paper 2009-9 Olivier Gervais, Ilan Kolet The dramatic reduction in global demand, and the decline in the spot price of crude oil in the second half of last year, may have significant implications for the future supply of oil. Investments in conventional methods of extraction have been constrained, since easily accessible oil reserves are typically concentrated in countries with geopolitical uncertainty and/or state-run oil companies. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Business fluctuations and cycles, Inflation and prices, International topics JEL Code(s): Q, Q4, Q41, Q43
The Role of Convenience and Risk in Consumers' Means of Payment Staff Discussion Paper 2009-8 Carlos Arango, Varya Taylor Using data from a 2004 survey of the Canadian public, the authors study the role of convenience and risk in consumers' use of cash relative to debit and credit cards. The authors find that consumers who perceive debit cards and credit cards to be more convenient and less risky than cash use them more frequently. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Bank notes JEL Code(s): E, E4, E41, L, L2
Household Debt, Assets, and Income in Canada: A Microdata Study Staff Discussion Paper 2009-7 Césaire Meh, Yaz Terajima, David Xiao Chen, Thomas J. Carter The authors use microdata from the 1999 and 2005 Surveys of Financial Security to identify changes in household debt, and discuss their potential implications for monetary policy and financial stability. They document an increase in the debt-income ratio, which rose from 0.75 to 0.95, on average. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Credit and credit aggregates, Financial stability, Productivity, Sectoral balance sheet JEL Code(s): E, E2, E21, E24
Assessing the Implementation of the IMF's 2007 Surveillance Decision Staff Discussion Paper 2009-6 Robert Lavigne, Garima Vasishtha The International Monetary Fund (IMF) recently adopted the "2007 Decision on Bilateral Surveillance Over Members' Policies," a landmark reform that modernizes the general principles of IMF surveillance. However, support for the reform was not unanimous, and doubts have been expressed about how the Decision would be applied in practice. The authors assess the first year […] Content Type(s): Staff research, Staff discussion papers Research Topic(s): International topics JEL Code(s): F, F3, F33