Market structure and pricing

• Fixed-income dealing and central bank interventions

  Staff Analytical Note 2022-9 David Cimon, Adrian Walton

  We summarize the theoretical model of central bank asset purchases developed in Cimon and Walton (2022). The model helps us understand how asset purchases ease pressures on investment dealers to restore market conditions in a crisis.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Coronavirus disease (COVID-19), Economic models, Financial institutions, Financial markets, Market structure and pricing JEL Code(s): G, G1, G10, G2, G20, L, L1, L10

• Vertical Bargaining and Obfuscation

  Staff Working Paper 2022-13 Edona Reshidi

  Is obscuring prices always bad for consumers? The answer depends on the market structure and on the negotiating power between manufacturers and retailers.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Market structure and pricing JEL Code(s): C, C7, C70, L, L1, L13, L4, L42

• Central Bank Liquidity Facilities and Market Making

  Staff Working Paper 2022-9 David Cimon, Adrian Walton

  We create a theoretical model of central bank asset purchases. The model helps explain how, in a crisis, these purchases ease pressures on investment dealers.

  Content Type(s): Staff research, Staff working papers Topic(s): Coronavirus disease (COVID-19), Economic models, Financial institutions, Financial markets, Market structure and pricing JEL Code(s): G, G1, G10, G2, G20, L, L1, L10
• February 2, 2022

  A Canadian interest rate benchmark regime for the future

  Remarks (delivered virtually) Toni Gravelle International Swaps and Derivatives Association New York, New York

  Deputy Governor Toni Gravelle discusses some important changes that may be coming to Canada’s interest rate benchmarks.

  Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Debt management, Financial markets, Financial system regulation and policies, Interest rates, Market structure and pricing

• Foreign Exchange Fixings and Returns Around the Clock

  Staff Working Paper 2021-48 Ingomar Krohn, Philippe Mueller, Paul Whelan

  We document a new empirical finding in the foreign exchange market: currency returns show systematic reversals around the benchmark fixings. Specifically, the US dollar, on average, appreciates in the hours before fixes and depreciates after fixes.

  Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates, Financial markets, Market structure and pricing JEL Code(s): F, F3, F31, G, G1, G15

• Rising US LNG Exports and Global Natural Gas Price Convergence

  Staff Discussion Paper 2021-14 Robert Ialenti

  We assess how rising exports of US liquefied natural gas affect the convergence of natural gas prices worldwide. Our results may have implications for the development of future LNG export capacity in Canada.

  Content Type(s): Staff research, Staff discussion papers Topic(s): International topics, Market structure and pricing JEL Code(s): C, C3, C32, F, F1, F15, K, K4, K41, L, L9, L95

• Centralizing Over-the-Counter Markets?

  Staff Working Paper 2021-39 Jason Allen, Milena Wittwer

  Would a shift in trading in fixed-income markets—from over the counter (bilateral trading) to a centralized electronic platform—improve welfare? We use trade-level data on the secondary market for Government of Canada debt to answer this question.

  Content Type(s): Staff research, Staff working papers Topic(s): Financial institutions, Market structure and pricing JEL Code(s): D, D4, D40, D47, G, G1, G10, G2, G20, L, L1, L10

• The Effects of Government Licensing on E-commerce: Evidence from Alibaba

  Staff Working Paper 2021-32 Ginger Zhe Jin, Zhentong Lu, Xiaolu Zhou, Chunxiao Li

  How does government licensing affect selling on online platforms? We examine the impact of China’s 2015 Food Safety Law on sellers and buyers on Alibaba, the largest e-commerce platform in that country.

  Content Type(s): Staff research, Staff working papers Topic(s): Market structure and pricing, Recent economic and financial developments JEL Code(s): D, D8, D82, K, K2, K23, L, L5, L8, L81

• Examining the Impact of Home Purchase Restrictions on China’s Housing Market

  Staff Working Paper 2021-18 Zhentong Lu, Sisi Zhang, Jian Hong

  How do “cooling measures” in the housing market—policies aimed to stabilize prices—affect the market? We use a structural model of housing demand and price competition among developers to evaluate China’s home purchase restriction policies implemented in 2010–11.

  Content Type(s): Staff research, Staff working papers Topic(s): Housing, Market structure and pricing JEL Code(s): O, O1, O18, R, R3, R31, R38

• Trade and Market Power in Product and Labor Markets

  Staff Working Paper 2021-17 Gaelan MacKenzie

  Trade liberalizations increase the sales and input purchases of productive firms relative to their less productive domestic competitors. This reallocation affects firms’ market power in their product and input markets. I quantify how the labour market power of employers affects the distribution and size of the gains from trade.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Labour markets, Market structure and pricing, Productivity, Trade integration JEL Code(s): D, D4, D43, F, F1, F12, F6, J, L, L1, L13