Monetary policy framework
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February 8, 2016
Monetary Policy and Financial Stability—Looking for the Right Tools
Deputy Governor Tim Lane discusses the links between monetary policy and financial stability. -
December 8, 2015
Prudent Preparation: The Evolution of Unconventional Monetary Policies
Governor Poloz speaks about the Bank’s updated framework for unconventional monetary policies. -
Estimating Canada’s Effective Lower Bound
In 2009, the Bank of Canada set its effective lower bound (ELB) at 25 basis points (bps). Given the recent experience of Sweden, Denmark, Switzerland and the euro area with negative interest rates, we examine the economics of negative interest rates and suggest that cash storage costs are the source of a negative lower bound on interest rates. -
November 13, 2015
Innovation, Central-Bank Style
Senior Deputy Governor Wilkins discusses how the Bank is tackling the most important strategic challenges facing central banks today and how innovative thinking is critical to its success. -
Forward Guidance at the Effective Lower Bound: International Experience
Forward guidance is one of the policy tools that a central bank can implement if it seeks to provide additional monetary stimulus when it is operating at the effective lower bound (ELB) on interest rates. It became more widely used during and after the global financial crisis. -
Quantitative Easing as a Policy Tool Under the Effective Lower Bound
This paper summarizes the international evidence on the performance of quantitative easing (QE) as a monetary policy tool when conventional policy rates are constrained by the effective lower bound (ELB). A large body of evidence suggests that expanding the central bank’s balance sheet through large-scale asset purchases can provide effective stimulus under the ELB. -
Monetary Policy and Financial Stability: Cross-Country Evidence
Central banks may face challenges in achieving their price stability goals when financial stability risks are present. There is, however, considerable heterogeneity among central banks with respect to how they manage these potential trade-offs. -
The International Experience with Negative Policy Rates
A key issue in the renewal of the inflation-control agreement is the question of the appropriate level of the inflation target. Many observers have raised concerns that with the reduction in the neutral rate, and the experience of the recent financial crisis, the effective lower bound (ELB) is more likely to be binding in the future if inflation targets remain at 2 per cent. -
October 27, 2015
Inflation Targeting—A Matter of Time
Deputy Governor Tim Lane discusses monetary policy decision making and how the Bank assesses the underlying trend in inflation.