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292 Results

Uncovering the use of haircuts in the Canadian repo market

Staff analytical paper 2026-39 Sadia Anum, Jabir Sandhu, Adrian Walton
We show that haircuts are rarely used in the Canadian dealer-to-client repo market and their usage did not increase materially during past stress events. Usage is concentrated among wealth managers and some foreign official institutions, likely reflecting regulatory or internal requirements.

Tracking Heterogeneous Spending Patterns with Credit Card Microdata

Staff analytical paper 2026-38 Jia Qi Xiao, Jackson Reid, Joey Daniels
We present a measure of account-level credit card spending constructed using credit bureau microdata, capturing monthly spending for approximately 80% of adults in Canada. Our measure offers higher frequency than other publicly available consumption metrics, and can be disaggregated by age, geographic location and credit history.

Non-bank financial intermediation: Canada’s submission to the 2025 global monitoring report

Staff analytical paper 2026-37 Thomas Thorn, Sylvia Xie
We share insights about non-bank financial intermediation in Canada in 2024. 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.

From Stress to Strategy: How Banks Balance the Scales

Staff working paper 2026-26 Ruben Hipp, Javier Ojea Ferreiro
This paper develops a stress-testing framework in which banks strategically adjust their balance sheets in response to regulatory constraints and market conditions. Applied to Canada’s largest banks, it quantifies the effects of macroprudential policies on lending and identifies systemic vulnerabilities through reverse stress testing.

The trade-offs between different designs of tokenized systems

Sparks at Bank article Sriram Darbha, Rakesh Arora
As interest in tokenization grows, so too does the focus on the design of tokenized systems. Different approaches—such as centralized or decentralized systems—could achieve similar outcomes. But the choice of design involves consequential trade-offs that shape how the entire ecosystem evolves.

The Impact of Potential Retail Central Bank Digital Currency on the Canadian Financial System During a Severe Recession

Staff analytical paper 2026-30 Sofia Priazhkina
This policy note examines how a non-interest-bearing retail central bank digital currency (CBDC) could affect the financial stability of Canada’s systemically important banks during a severe recession. Stress test results show that the banks remain resilient, maintaining key regulatory ratios even under high CBDC demand.

Understanding Systemic Risks in the Canadian Financial System

This paper reviews recent efforts to monitor and assess systemic risk in the Canadian financial system and outlines a framework for future system-wide stress testing.

Central Bank Crisis Interventions and the Term Structure of Market Fear

How do central bank crisis interventions calm market fears? Using options data, we measure the perceived risk of large asset price drops across horizons from two weeks to ten years. Studying the Fed's response to the 2020 turmoil, we find asset purchases reduce short-term fears while interest rate actions shape long-term expectations.

Integrating Non-traditional Data and AI into Central Banking: A Canadian Perspective

This paper reviews how central banks are integrating non traditional data and artificial intelligence (AI) into policy analysis and operations. Using the Bank of Canada’s experience, it examines emerging applications, governance challenges, and strategic choices for responsibly scaling AI to enhance insight, efficiency, and institutional resilience.

When parents co‑sign a mortgage to help their adult children buy their first home

Sparks at Bank article Shaoteng Li
Rising housing costs are leading to an increasing share of first-time homebuyers seeking financial support from their parents. Specifically, Canada has experienced a noticeable rise in instances of parents co-signing mortgages with their adult children. This practice allows buyers to purchase more expensive homes—but it can also make both parties vulnerable to financial disruptions.
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