Op-Eds
The momentum around initial coin offerings (ICOs) continues to build. Since 2016, when less than US$100-million in ICOs was issued, more than $20-billion in capital has been raised. By the end of 2017, ICO funding originating in Canada totalled $175-million, good for eighth worldwide.
Naturally, skepticism of such a bonanza abounds. This is perhaps especially true when we talk about cryptocurrencies that, in and of themselves, have no value and seem ripe for fraud. However, despite these valid concerns, in a recent C.D. Howe Institute commentary, we argue that ICOs do indeed fill a market gap, under limited circumstances. What is critical for regulators and investors is determining these circumstances.
ICOs are a form…
As was widely expected, the Bank of Canada announced on Wednesday that it was not changing its target overnight rate. Despite the announcement reinforcing expectations, the emphasis on caution was enough to knock more than a half a cent off the value of the Canadian dollar before the end of Wednesday morning. With uncertainty on the horizon for 2018, the year promises to be a challenging one for our central bankers – one that will require market guidance.
The overall tone was balanced and the announcement emphasized caution. The global economy is in good shape with U.S. growth in the third quarter stronger than expected. Risks, however, remain in the form of geopolitics and trade. It also simultaneously warned that "higher rates…
Canada has unfinished business when it comes to preparing for the next big financial crisis. Certainly, our financial system held up comparatively well in the 2008 crisis, and lots has been done, but we have shortcomings still to address.
When the International Monetary Fund last reviewed Canada's financial system in 2014, it recommended we do better in managing federal-provincial co-ordination around systemic risk oversight, and improve systemic risk management in capital markets. The IMF will return soon for an update assessment. So the question is, how are we doing?
As argued in a recent C.D. Howe Institute paper, Canadians should expect a higher level of preparedness from all relevant federal and provincial…
The rise in house prices – especially in Toronto and Vancouver – has coincided with a build-up of risks in the mortgage market and homeowners taking on too much debt relative to their income.
In response, the federal Department of Finance has proposed shifting some of the risk of mortgage defaults onto lenders from insurers, through a mortgage insurance deductible that would come out of the lender’s pocket in the case of mortgage default. Good intent. Bad idea.
The hope is that by shifting some of the potential losses from mortgage defaults onto lenders, a deductible would reduce the number of risky mortgage loans originated by lenders. But introducing a mortgage insurance deductible is a blunt and ineffective tool that…
You have probably heard of bitcoin. You might have even heard about its underlying technology, the blockchain. What you may not have realized is that it is not bitcoin that will change our lives, but other applications of blockchain technology in areas such as payments, contracts and the provision of government services.
Blockchain technology in its simplest form allows transactions to occur between individuals and institutions without the need for a third party. This would entail a big change for financial services firms. Since the Renaissance period, they have relied on a double-entry bookkeeping system whereby each transaction requires a debit on the asset side and a credit on the liability side. This form of record-keeping…
