Canada is on the cusp of a new chapter in its monetary history. The emergence of crypto assets like Bitcoin and stablecoins, such as Facebook’s Diem, offer the promise of major gains in the efficiency and safety with which Canadians pay for goods and services and invest their savings. But a...

The Bank of Canada’s mandate is to target an inflation rate of 2 percent, but financial instability can have important effects on economic activity, which can influence the Bank’s ability to hit that target. The concern is that monetary policy and financial stability might work at...

In Budget 2018, the federal government announced that it would review the merits of open banking. In January 2020, the Advisory Committee on Open Banking determined that the benefits of open banking outweighed the cost and what was needed was a plan for implementation. In this Commentary, we...

The current pandemic and the accompanying economic lockdowns have led to the deepest economic downturn since the Great Depression. Fiscal and monetary authorities have acted in kind, with unprecedented stimulus and expansion of balance sheets. The Bank of Canada, for its part, dropped the...

Monetary policy transmission from the developed to the developing world.

As lender of last resort, the Bank of Canada has the responsibility of stepping in to provide liquidity in cases when markets require emergency funding. In crisis situations, a timely and effective response is imperative for avoiding systemic breakdowns. In this Commentary, I argue that in order...

We analyze the link between monetary policy and the growth of shadow banks, and by extension, financial stability in Canada. Using monthly financial market data from 1991-2015 in a two-stage time-varying coefficient Bayesian vector autoregression approach, we find that greater shares of shadow...