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154 Results

COVID-19 Crisis: Lessons Learned for Future Policy Research

One year later, we review the events that took place in Canadian fixed-income markets at the beginning of the COVID-19 crisis and propose potential policy research questions for future work.

Market Concentration and Uniform Pricing: Evidence from Bank Mergers

Staff Working Paper 2021-9 João Granja, Nuno Paixao
We show that US banks price deposits almost uniformly across their branches and that this pricing practice is more important than increases in local market concentration in explaining the deposit rate dynamics following bank mergers.

Distributional Effects of Payment Card Pricing and Merchant Cost Pass-through in Canada and the United States

Although credit cards are more expensive for merchants to accept than cash or debit cards, merchants typically pass through their costs evenly to all customers. Along with consumer card rewards and banking fees, this creates cross-subsidies between payment methods. Because higher-income individuals tend to use credit cards more than those with lower incomes, our results indicate that these cross-subsidies might lead to regressive distributional effects.

Safe Payments

In a cashless economy, would the private sector invest in the optimal level of safety in a deposit-based payment system? In general, because of externalities, the answer is no. While the private sector could over- or under-invest in safety, the government can use taxes or subsidies to correct private incentives.

Security and convenience of a central bank digital currency

Staff Analytical Note 2020-21 Charles M. Kahn, Francisco Rivadeneyra
An anonymous token-based central bank digital currency (CBDC) would pose certain security risks to users. These risks arise from how balances are aggregated, from their transactional use and from the competition between suppliers of aggregation solutions.

The Interplay of Financial Education, Financial Literacy, Financial Inclusion and Financial Stability: Any Lessons for the Current Big Tech Era?

Staff Working Paper 2020-32 Nicole Jonker, Anneke Kosse
The objective of this paper is twofold. First, we assess whether financial education might be a suitable tool to promote the financial inclusion opportunities that big techs provide. Second, we study how this potential financial inclusion could impact financial stability.

The potential effect of a central bank digital currency on deposit funding in Canada

Staff Analytical Note 2020-15 Alejandro García, Bena Lands, Xuezhi Liu, Joshua Slive
A retail central bank digital currency denominated in Canadian dollars could, in theory, create competition for bank deposit funding.

An Economic Perspective on Payments Migration

Staff Working Paper 2020-24 Anneke Kosse, Zhentong Lu, Gabriel Xerri
Consumers, businesses and banks make millions of payments each day using a variety of instruments, such as debit cards, cheques and wires. Canada is currently developing three new systems to process these transactions: Lynx, Settlement Optimization Engine (SOE) and Real-Time Rail (RTR).