Requiring the Bank of Canada to follow a financial stability mandate is a bad idea – Globe and Mail Op-Ed
In the coming months, the Bank of Canada‘s mandate to target inflation is coming up for review. Some have suggested that the mandate should be expanded to include responsibility for financial stability, defined as heading off the imbalances that could trigger a severe financial crisis, such as what the world experienced just more than a decade ago. In a recent C.D. Howe Institute report, we argue, marshalling historical and empirical evidence, that granting the Bank an explicit mandate to target financial stability is not a good idea, and that doing so would create a conflict with its tried and true mandate for price stability.
Calls for central banks to take on responsibility for maintaining financial stability are…
Omran, Kronick – The Productivity Opportunity In Canada’s Financial Sector
From: Farah Omran and Jeremy Kronick To: The Hon. Bill Morneau, Minister of Finance Date: November 21, 2019 Re: The Productivity Opportunity in Canada’s Financial Sector Productivity improvement is a central challenge to Canada, and its financial services sector is the proverbial low-hanging fruit. The sector not only employs relatively more educated workers and generates higher earnings than […] Glen Hodgson – Creating A Policy Framework For Sustainable Green Finance
From: Glen Hodgson To: Canadians interested in sustainable finance Date: November 20, 2019 Re: Creating a policy framework for sustainable green finance Action on green finance is taking place in many places and in many directions, but there are still many gaps, with no coherent policy framework in place. What would such a framework look like? The expert […] The Bank of Canada and Financial Stability: A New Mandate?
The Bank of Canada’s current mandate should not be expanded to include financial stability, says a new report from the C.D. Howe Institute. In “The Bank of Canada and Financial Stability: A New Mandate?,” authors Michael D. Bordo and Pierre L. Siklos marshal historical and empirical evidence to make the case that the Bank of […] Our Financial System Saved Us From The Worst Of The 2009 Crisis, Now It’s Holding Our Economy Back – Financial Post Op-ed
Discussion of Canada’s lagging productivity performance was missing from the recent federal election campaign, which is perhaps no surprise. It’s not a subject that lends itself to daily announcements and photo ops. But now that the electoral dust has settled it’s time to take steps to address the issue.
There is no better place to start than to boost productivity in the financial services sector, where Canada possesses an international comparative advantage. The sector not only employs relatively more educated workers and generates higher earnings than the rest of the economy, it has the unique ability to boost the entire economy’s productivity while boosting its own.
Surprisingly, however, the financial services sector’s…
Ripe for Reform: Modernizing the Regulation of Financial Advice
Streamlining the regulation of financial advice could create a more finely tailored, fit-for-purpose oversight regime, says a new report from the C.D. Howe Institute. In “Ripe for Reform: Modernizing the Regulation of Financial Advice,” author Joanne De Laurentiis argues merging and rationalizing financial advice regulators would eliminate rule overlap, remove operational costs for dealers and […] Productivity and the Financial Services Sector – How to Achieve New Heights
Restrictive rules holding back innovation in the financial sector should be updated to bolster Canada’s productivity, says a new report from the C.D. Howe Institute. In “Productivity and the Financial Services Sector – How to Achieve New Heights,” authors Farah Omran and Jeremy Kronick note that over the past 15 years Canada has lagged behind […] Ambler, Kronick – Lessons for Canada in the US Repo Rate Spike
To: Canadians Concerned about Monetary Policy From: Jeremy Kronick and Steve Ambler Date: October 11, 2019 Re: Lessons for Canada in the US Repo Rate Spike Last month, overnight borrowing rates in the US skyrocketed as high as 9 percent as the overnight lending market froze and financial institutions with excess cash on deposit at […] Denis Meunier – Canada Business Corporation Act Changes To Beneficial Ownership: Half-measures To Combat Money Laundering And Terrorist Financing
From: Denis Meunier To: Financial Entities, Securities Dealers, Life Insurance Sector and Money Services Businesses Date: October 9, 2019 Re: Canada Business Corporation Act changes to beneficial ownership: half-measures to combat money laundering and terrorist financing Ottawa moved too cautiously on ownership declarations from business entities in its recent changes to the act that governs […] A Tale of Two Pension Plans: My Experience with a Contingent Pension Plan and the Lessons Learned
October 3, 2019 – By sharing the experience of a pension plan operating in two very different regulatory environments, pension expert Randy Bauslaugh shows how contingent pension plans, with benefits conditional on financial performance, are more reliable in times of stress and more cost-efficient than other alternatives. But they require accommodative legislation to survive economic […] Thorsten Koeppl – Libra Could Kickstart Digital Currencies
From: Thorsten Koeppl To: Bank of Canada Governor Stephen Poloz Date: July 17, 2019 Re: Libra Could Kickstart Digital Currencies Facebook has teamed up with some heavyweights in the payments industry such as Visa and Mastercard and other online platforms to usher in a new era for payments services: an international, widely accepted digital currency called Libra. This should […] Facebook’s Libra Shows It’s Time For Central Banks To Step Up – Globe And Mail Op-ed
Facebook has teamed up with some heavyweights in the payments industry such as Visa and Mastercard and other online platforms to usher in a new era for payments services: an international, widely accepted digital currency called Libra.
This should not come as a surprise. Online trading – often cross-border – cries out for such a payment instrument. And online networks reach full functionality only if they provide a medium of exchange that can be used to trade or transfer value seamlessly on the network.
Privacy and regulatory concerns aside, Libra thus makes a lot of sense as a business model.
But its true value may arise from somewhere else: being a credible threat to the international monetary order. Central banks…