This paper discusses how the bankers' acceptance (BA) market in Canada is organized and its essential link to the Canadian Dollar Offered Rate (CDOR). Globally, BAs are a niche product used only in a limited number of jurisdictions. In Canada, BAs provide a key source of funding for small and...

During and after the Great Recession of 2008-09, conventional monetary policy in the United States and many other advanced economies was constrained by the effective lower bound (ELB) on nominal interest rates. Several central banks implemented large-scale asset purchase (LSAP) programs, more...

Prudential liquidity requirements are a relatively recent regulatory tool on the international front, introduced as part of the Basel III accord in the form of a liquidity coverage ratio (LCR) and a net stable funding ratio (NSFR). I first discuss the rationale for regulating bank liquidity by...

Non-bank financing provides an important funding source for the economy and is a valuable alternative to traditional banking. It helps enhance the efficiency and resiliency of the financial system while giving customers more choices for their financial services. Unlike banking, it is not...

Every initiative that potentially increases the effectiveness of monetary policy is welcome. The European Union's Capital Markets Union (CMU) project is potentially a point in case, even though monetary policy is not a policy target of CMU. Increasingly developed capital markets in the EU are...

Until a few months ago, the stock market narrative in the United States could have been summarized by the popular acronym BTFD – or ‘buy the fucking dip’. Analysts and strategists, emboldened by the world’s synchronized recovery, Trump’s pro-business policies and ample liquidity,...

We present a standard model of financial innovation, in which intermediaries engineer securities with cash flows that investors seek, but modify two assumptions. First, investors (and possibly intermediaries) neglect certain unlikely risks. Second, investors demand securities with safe cash...

הקפיטליזם שולט בעולם. דיונים סוערים מתנהלים בין המלומדים הממסדיים לבין "הביקורתיים" על טיבו של הקפיטליזם הגלובלי. הבעיה היא שטיבו של המוסד המרכזי בקפיטליזם -- ההון...

Central counterparty (CCP) initial margin models are procyclical by nature, and CCPs use antiprocyclicality (APC) tools to mitigate this. However, despite the widespread use of such tools, margin models of CCPs around the world reacted severely to the heightened volatility during the March 2020...

We study the role of intermediaries (brokers) in the Canadian mortgage market. In this market, consumers can search for quotes in one of two ways: on their own or via a broker. We provide descriptive evidence that borrowers who transact through brokers are different from those who do not....