Monetary Policy & Banking

The Decline and Fall of ICBC

— Apr 5, 2018

The Decline and Fall of ICBC finds that misguided government decisions that stalled revenues and failed to contain runaway costs are largely to blame for the financial crisis facing the Insurance Company of British Columbia, which is facing a $1.3 billion loss this year.

Uninsured Mortgage Regulation: From Corporate Governance to Prescription

— Oct 11, 2017

Uninsured Mortgage Regulation: From Corporate Governance to Prescription finds that requiring a stress test for Canadians who provide at least a 20 per cent down payment to purchase a home—a change proposed by the country’s financial regulator—is an unnecessary step that could negatively affect homebuyers across Canada and do more harm than good.

Interest Rates and Mortgage Borrowing Power in Canada

— Aug 17, 2017

Interest Rates and Mortgage Borrowing Power in Canada finds that the ability of Canadians to borrow for a home has increased 126 per cent over the past two decades because of declining interest rates and rising incomes, likely driving up prices.

The Impact of Higher Interest Rates on the Cost of Servicing Government Debt

— Feb 24, 2016

The Impact of Higher Interest Rates on the Cost of Servicing Government Debt spotlights the interest rate risks faced by governments across the country using Ontario and Quebec—Canada’s two largest and most indebted provinces—as examples. It finds that a higher than expected rise in interest rates could jeopardize provincial government promises of balanced budgets and surpluses.

Why Are Interest Rates So Low?

— Feb 11, 2016

Monetary policy is having less and less impact on interest rates in developed economies such as Canada because the demographic relationship between borrowers and savers has changed dramatically. Based on financial and demographic data for 29 developed countries, Why Are Interest Rates So Low? presents a ground-breaking new model of how interest rates are determined by focusing on changing demographics—not monetary policy.

Recent Monetary Policy & Banking Commentaries and Blog Posts

Austerity—not increased spending—helped lay the groundwork for Portugal’s recovery

Livio Di Matteo

In 2012, government spending declined by 7.3 per cent.

Demographics and Entrepreneurship blog series: Policies to spur entrepreneurship

Sofia Johan

Tax policy is the most efficient way to incentivize high-growth entrepreneurship and access to finance.

Under threat—the lucrative export of U.S. dollar notes and U.S. Treasury securities

Herbert Grubel

Overspending in the United States causes market forces to appreciate the dollar exchange rate.

Each episode of financial disaster is a little different than the others

William Watson

A phrase heard almost hourly at the conference was “this time is different.”

Cryptocurrency investors eye provinces with low electricity rates

Kenneth P. Green, Elmira Aliakbari, Ashley Stedman

Bitcoin mining is a computer process that consumes a considerable amount of power.

The natural rate of unemployment—are we there yet?

William Watson

Only surprises have real effects, Friedman argued, but their effects last only until people realize what’s going on.