Kronick, Omran – Coronavirus And Supply-side Shocks
To: Fiscal Policymakers From: Jeremy M. Kronick and Farah Omran Date: February 28, 2020 Re: Coronavirus and Supply-side Shocks The news on coronavirus seems to be getting worse each day. Policymakers have rightly been focused on the health of Canadians. Meanwhile, fear has reached financial markets, which have been shedding points at alarming rates the […] Canada’s shadow banks are now too big to ignore – National Post Op-Ed
In Canada the financial services sector weathered the 2007-08 global “credit crunch” better than it did in many other developed countries. One argument for why, certainly in contrast to the U.S., was the smaller size of our “non-bank financial intermediation” (NBFI) sector, more commonly referred to as “shadow banking.” But rapid growth in the shadow sector since the crisis suggests this resilience might be under threat. What does that mean for monetary policy, financial stability and regulation? As it turns out, a lot.
Broadly speaking, the shadow sector includes investment funds, private lenders like mortgage finance companies, companies that offer private-label securitization like asset-backed securities, and more. Shadow…
Predicting Financial Crises: The Search for the Most Telling Red Flag in the Economy
February 13, 2020 – Canadians’ level of indebtedness is raising concerns on the basis of several traditional measures, but the most reliable predictor of trouble ahead is the debt-service ratio, says a new report from the C.D. Howe Institute. In “Predicting Financial Crises: The Search for the Most Telling Red Flag in the Economy,” authors […] Water in the Wine? Monetary Policy and the Impact of Non-bank Financial Intermediaries
February 4, 2020 – The rapid growth of the non-bank financial intermediation sector, formerly called shadow banking, appears to dilute monetary policy effectiveness in Canada and poses a risk to financial stability, according to a new report from the C.D. Howe Institute. In “Water in the Wine? Monetary Policy and the Impact of Non-bank Financial […] Jeremy Kronick on BNN – Growth in Non-bank Financial Intermediaries Could Weaken Monetary Policy
Jeremy Kronick, Associate Director of Research at the C.D. Howe Institute, joins BNN Bloomberg to discuss the rapid growth of the non-bank financial intermediation sector and its possible impact on the Bank of Canada’s monetary policy use.
John D. Murray – Central Banks and the Future of Money
From: John D. Murray To: Canadian financial regulators Date: January 31, 2020 Subject: Central Banks and the Future of Money Central banks around the world are now giving serious consideration to the pros and cons of making central bank digital currencies (CBDCs) available to the general public. While the consensus view in earlier periods seemed to be that any […] Jeremy Kronick on BNN – Income inequality has flatlined since financial crisis
Jeremy Kronick, Associate Director of Research at the C.D. Howe Institute, joins BNN Bloomberg to discuss the link between monetary policy, income inequality and inflation in Canada.
One More Case for Longer-Term Mortgages: Financial Stability
Longer-term mortgages would enhance both consumer choice and financial stability, but regulatory changes are needed to help them develop into a significant part of the Canadian residential mortgage market, says a new report from the C.D. Howe Institute. In “One More Case for Longer-Term Mortgages: Financial Stability,” author Michael K. Feldman notes that according to […] Modernizing the regulation of financial advice – Globe and Mail Op-Ed
Canada’s investment advisory industry has evolved through consolidation and new products to meet the needs of a more demanding and active investing public over the past two decades. Unfortunately, its regulatory structure has not kept pace. Overlapping regulatory organizations and outdated rules are limiting innovation and efficiency.
Unlike sectors in which industry must petition government agencies for regulatory relief, companies in the investment and mutual-fund industry can propose a better solution for the sector and Canadian investors. And as I argue in a recent C.D. Howe Institute report, the time is ripe for a merger.
First, a little background. The bulk of the financial advice industry operates through dealer…
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 […]