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618 Results

Stressed but not Helpless: Strategic Behaviour of Banks Under Adverse Market Conditions

Staff Working Paper 2021-35 Grzegorz Halaj, Sofia Priazhkina
Our stress-testing tool considers banks under stress that can strategically manage their balance sheets. Using confidential Canadian supervisory data, we assess whether bank behaviour to maximize shareholder value can amplify a hypothetical stress scenario.

The Side Effects of Safe Asset Creation

Staff Working Paper 2021-34 Sushant Acharya, Keshav Dogra
The secular decline in real interest rates has created a challenge for monetary policy, now confronting the zero lower bound more often. An increase in the supply of safe assets reduces downward pressure on the natural interest rate. This allows monetary policy to reach price stability and full employment, but not without cost—permanently lower investment.
Content Type(s): Staff research, Staff working papers Topic(s): Fiscal policy, Monetary policy implementation JEL Code(s): E, E3, E4, E5, G, G1, H, H6

BoC–BoE Sovereign Default Database: What’s new in 2021?

Staff Analytical Note 2021-15 David Beers, Elliot Jones, Zacharie Quiviger, John Walsh
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.

Analyzing supply and demand for business loans using microdata from the Senior Loan Officer Survey

Staff Analytical Note 2021-13 Dylan Hogg
Both supply and demand factors help determine the level of business lending in the economy, but most data show only their combined effect on prices and quantities. Using the Bank of Canada’s Senior Loan Officer Survey microdata on financial institutions’ lending conditions and demand, we separate supply from demand effects.

ToTEM III: The Bank of Canada’s Main DSGE Model for Projection and Policy Analysis

ToTEM III is the most recent generation of the Bank of Canada’s main dynamic stochastic general equilibrium model for projection and policy analysis. The model helps Bank staff tell clear and coherent stories about the Canadian economy’s current state and future evolution.

Bank Runs, Bank Competition and Opacity

Staff Working Paper 2021-30 Toni Ahnert, David Martinez-Miera
How is the stability of the financial sector affected by competition in the deposit market and by decisions banks make about transparency? We find that policies that aim to increase bank competition lead to higher bank deposit rates, increasing both withdrawal incentives and instability.

A New Measure of Monetary Policy Shocks

Staff Working Paper 2021-29 Xu Zhang
Combining various high frequency financial data with central bank projections, I construct a new measure of monetary policy shocks not predictable by the public information preceding a central bank’s announcements. I then study the causal effects of monetary policy on the macro economy.

Consumer Cash Withdrawal Behaviour: Branch Networks and Online Financial Innovation

Staff Working Paper 2021-28 Heng Chen, Matthew Strathearn, Marcel Voia
The physical network of bank branches is important in how consumers manage their cash holdings. This paper estimates how consumer withdrawal behaviour responds to the distance they must travel to their branch.
Content Type(s): Staff research, Staff working papers Topic(s): Bank notes, Digital currencies and fintech JEL Code(s): G, G2, G21, R, R2, R22

COVID-19 crisis: Liquidity management at Canada’s largest public pension funds

We examine how the eight largest Canadian public pension funds managed liquidity during the market turmoil in March 2020. The funds were generally resilient to large demands for liquidity and relied heavily on Canada's core funding markets.

An Exploration of First Nations Reserves and Access to Cash

Staff Discussion Paper 2021-8 Heng Chen, Walter Engert, Kim Huynh, Daneal O’Habib
Adequate cash distribution is one the Bank of Canada’s core interests. Canadians’ ability to access cash influences the Bank’s thinking on issuing a central bank digital currency. We provide a perspective on these issues by exploring access of First Nations reserves to cash.