Council Reports
June 22, 2020 – Governments and regulators should set out guidelines to allow for creativity in encouraging investments, such as a “sandbox” where innovative approaches can be tested, according to a new C.D. Howe Institute working group report.
The C.D. Howe Institute Crisis Working Group on Monetary and Financial Measures argues such measures would increase the confidence of lenders and investors when engaging with businesses.
The group, co-chaired by David Dodge, former Governor of the Bank of Canada, and Mark Zelmer, former Deputy Superintendent, OSFI, also tackled issues such as the underwhelming uptake of certain support measures offered by governments, uncertainty on future policy responses to the pandemic,…
May 28, 2020 – The C.D. Howe Institute’s Monetary Policy Council (MPC) recommends that the Bank of Canada maintains its target for the overnight rate, its benchmark policy interest rate, at 0.25 percent for at least a year.
The MPC provides an independent assessment of the monetary stance consistent with the Bank of Canada’s 2 percent inflation target. Jeremy Kronick, Associate Director, Research, chaired today’s meeting, sitting in for the MPC’s usual chair, William Robson, the Institute’s President and CEO. Council members make recommendations for the Bank of Canada’s upcoming interest-rate announcement, the subsequent announcement, and the announcements six months and one year ahead.
All ten members…
April 23, 2020 – Between early March and mid-April, the Bank of Canada’s balance sheet more than doubled, dwarfing anything seen in 2008. Moreover unlike 2008, this increase has serious implications for future inflation, because the Bank’s increased liabilities are not the result of government deposits, but rather increased “settlement balances” or deposits by financial institutions, which increases the monetary base.
Once the pandemic and economic crisis passes there is no easy solution to the potential inflation problem arising from more money chasing fewer goods and services. Trying to unwind the Bank’s balance sheet by selling longer-term assets is fraught with political risk. Alternatively, while a floor system could help…
