Taxes are going up, TO condo prices are going down and recreational property up 15% to 40% in the Canadian market.
What Bank of America Just Said is Shocking

Horrific Canadian Banking Corruption Right Before

The Banking System is in Free-Fall
The Financialization of Real Estate
The FDIC Threatens Downgrades That Will Cut Off Ac
Bitcoin regulations are coming

Are we in a bubble and, if so, when will it pop?

Canadian real estate and government, March 29

FIRE report January 12th

BOC and reconciliation with Indigenous people

Nov 26 FIRE report

FSIM FIRE report Nov 23

Nov 18th FIRE report

Poloz debunked, Nov 12 FIRE report

Central bank digital currencies: foundational prin

Nov 5th FIRE report

FIRE report November 2nd

Canadian real estate February 24

Real estate: Feb 9, bulls vs bears

Feb 1, The Dumb Money Real Estate Vid

January real estate report 2021

December 4th real estate report

Real estate, mortgage debt to income ratio improve

Real estate: fiscal conservatism/ponzi neoliberali

Caution for real estate investors, Oct 14th report

Canadian bank industry overview - part 1

Why insurance should partner with flood-claim.com

Canadian large bank comparison

Current state of fintech in Canada

XE.com explains their Big Data and AI strategy.

Greenpeace urges TD bank boycott

Insurance flood US vs Can comparison.

Canadian bank industry overview part 5

Canadian banking industry overview part 4

Part 3 Canadian bank industry overview

Canadian banking overview - part 2

Death to bitcoin, long live bitcoin

RBC to integrate Wave Technologies

Deposits have skyrocketed since the start of the p

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Research
Part 2: The Merchant Loyalty Industrial Complex Collapse
fsim.ca/docs/Credit_cards_Part_2v4.pdf
Mark Sibthorpe
Since November 2, 2021, Loyalty Ventures Inc.'s (Airmiles) market cap has decreased from $861.42M to $2.11M, a decrease of -99.75%. This compares closely to 2018, when Aimia sold Aeroplan back to Air Canada and partners TD and CIBC for $238 million. For reference, in 2005 Aeroplan launched an IPO valuing it at $2 billion. Related to Aimia’s downfall, it had also previously sold the UK Nectar program to Sainsburys for $120 million, $580 million lower than it paid for Nectar in 2007.
This report digs under the surface and uncovers why loyalty is going the way of the dodo.
Merchants should not waste time fighting card networks
fsim.ca/docs/Card_fees_ongoing.pdf
Mark Sibthorpe
This is part one of a two part assessment of merchant frustration due to high credit card fees. The second part of this report will outline an alternative approach that merchants can consider. An approach that is a win for them and also for the card networks.
The full story of SVB March 12th, 2023
fsim.ca/docs/SVB_special_report2.pdf
Mark Sibthorpe
Aggregated news and research related to SVB. Apart from SVB, included in this report is related news with respect to other banks and non-traditional companies looking to add financial services that also appear risky.
March 2023 bank earnings summary
fsim.ca/docs/bankearningsfriday.pdf
Mark Sibthorpe
This report provides a snapshot into recent bank earnings and related news as published in fsim.ca reports.
Real estate report: October 30th, 2020
fsim.ca/docs/Oct30rereportv1.pdf
Mark Sibthorpe
The big buzz in real estate recently is Mark Carney being scooped up by Brookfield. This means more juice for riskier borrowers. Brookfield, a huge player in real estate, both residential and commercial, recently bought its remaining shares from Sagen (Genworth MI Canada), which values the company at $3.8 bn.
VersaBank’s New High-Security VPN Proving Especially Valuable During COVID-19 Pandemic
fsim.ca/docs/TailscaleReleaseMarch30FINAL.pdf
Press Release
2014 FSIM when Bernanke visited Montreal
fsim.ca/docs/MockBernanke.pdf
Mark Sibthorpe
Considering Bernanke is hated by the Republicans and hated even more by the Democrats, and is currently under scrutiny for saving AIG but not Lehman, (in hindsight) with respect to issues over solvency vs liquidity, the Montreal lovefest attended by 1,100 people yesterday must have been a welcome respite. Click the link to read the entire 2014 report.
Eisman's big Canadian bank short
fsim.ca/docs/eisman2.pdf
Mark Sibthorpe
I have been reporting on Steve Eisman's short position for quite some time. As the analyst reaction to Eisman shows (link below), Eisman has taken a lot of heat for shorting Canadian banks. Instead of capitulating, in September 2019 he publicly disclosed the fact that he added Canadian Tire to his position, He explains the rationale for this in a BNN interview late 2019. Essentially, his big concern with respect to banks was non-performing loans in Alberta. He feels Canadian bank CEOs are not prepared for a credit cycle. He specifically referenced ATB (a private bank) in discussing his concerns. Looking at the numbers today, my guess is that he has made off like a bandit.
VersaBank Beta-Testing Its New, High Volume Mortgage Finance App
fsim.ca/docs/VBCortelMortFinanceAppFeb62020.pdf
Press Release
VersaBank announces it is initiating beta-testing on its newly developed high-volume mortgage software app with the Cortel Group, one of Canada’s largest home and condominium builders. The app, named “Direct Connect”, was designed to facilitate and significantly reduce the lengthy finance approval process typically experienced by home buyers when visiting home and condo pre-construction sales offices.
How and why you need to defend your brand against disruptors
Mark Sibthorpe
Technology, and being open to opportunities, has preempted transformation in banking. At the top of change are Mint, PayPal and ApplePay; three examples of transformative solutions that are now ubiquitous. On the horizon: Uber and Google, both having recently announced partner based banking services. Further down in the plumbing is Duca Impact Labs, Versabank, and Revolut. This report shows how cost conscious FIs can, not only stay relevant in the face of adversity, but punch well above their weight. All thanks to creative thinking and the ongoing commoditization of technology.
Kick the can(nomics)
fsim.ca/docs/Kick.pdf
Mark Sibthorpe
Canada has used consumer debt to provide life support to the economy. This strategy which basically pushed the day of reckoning to the next government was old back in 2014, and now is well past its sell-by-date. Recognizing this, and desperate to keep the economy out of a recession, Trudeau is spending more money now than any government in Canadian history. This report disusses a possible alternative.
ScoreCard Bill Morneau, Canada's Minister of Finance
fsim.ca/docs/ScoreCardMorneau.pdf
Mark Sibthorpe
This report is a scorecard I designed in order to rank the performance of the current Minister of Finance, Bill Morneau. I do regular rankings because, otherwise, I cannot measure the performance in a meaningful way. The scoring is based on a variety of metrics as detailed on the ‘score-table’ on page 3. Examples of the criteria and weighting include:
Observations and overview of 2018 NB flood support from government and insurance companies.
fsim.ca/docs/Observations and overview of 2018 NB flood support from government and insurance companies..pdf
Mark Sibthorpe
Flood aftermath is linked to post traumatic stress. Here are some findings from a study conducted by Queensland University following a flood:
"The findings showed that aftermath stress contributed to poor mental health outcomes over and above the flood itself, prior mental health issues and demographic factors," Ms Dixon said.
"Aftermath stress was the strongest predictor of post-traumatic stress symptoms with 75 per cent of people saying the most difficult aspect was the aftermath and dealing with insurance companies," she said.
With this in mind, I felt it was important to understand how New Brunswick flood victims were treated.
Update Argentina: a sign of the times
fsim.ca/docs/Update Argentina_ a sign of the times.pdf
Mark Sibthorpe
Argentina is in the news daily because the situation is dire, and may be an indication of further contagion. The most dramatic story that speaks of the a leading cause of its troubles was the recent arrest of the public works secretary, Jose Lopez. June 15th he was caught hiding millions in cash in a monastery. No this is not a plot for a comedy.
Summary of Canada's flood news, 2017 to present
fsim.ca/docs/Summary-of-flood-news-2017-present.pdf
Mark Sibthorpe
This report covers flood news in Canada from 2017 to present and highlights the relevent issues for home-owners and the insurance industry.
Banking on Pot
fsim.ca/docs/c10191_banking-on-pot.pdf
SBS
As states across the US legalize marijuana for both medicinal and recreational purposes, it has fueled a growing industry of marijuana related businesses (MRBs).
Canadian banking industry overview
Mark Sibthorpe
The industry overview is divided into 5 parts:
Introduction
Small banks
Small medium sized banks
Medium sized banks
Medium large banks
2014 Mobile payments the Apple pay way
fsim.ca/docs/Mobile_Payments_Apple_Pay_2014.pdf
Mark Sibthorpe
With Walmart Pay about to userp Apple Pay, I thought I would share my 2014 book on mobile payments and loyalty. The guilde was written for Merchants that want to understand loyalty, credit, mobile payments and Apple Pay, but anyone involved with credit and loyalty might find it useful.
The book is a prelude to Walmart leaving MCX, and chronicles the evolution that led to Walmart Pay. There is an extensive case study of Walmart that looks into its efforts to become an ILC and to avoid paying credit card transaction fees ('merchant discount').
It offers readers a step-by-step methodology for evaluating and transforming credit and loyalty programs. The strategies are based on proven examples and industry facts. The Nectar, Target, Canadian Tire and Walmart case studies are examples of the practical approach I have taken, written with the intent that merchants can use them as blueprints for their own initiatives.
Death to bitcoin, long live the blockchain (See full report)
Mark Sibthorpe
Jamie Dimon calls bitcoin a fraud used by criminals, yet he has jumped into the blockchain with both feet.
TD bank industry conduct
fsim.ca/docs/tdind2.pdf
Mark Sibthorpe
TD’s share price recently collapsed by $7 bn in one day due to CBC’s allegations of aggressive selling tactics. A huge fall from a bank that was trading at a premium as recently as January. This was even before the most recent allegation of TD attempting to avoid paying taxes on advertising.
This report chronicles the events leading up to the collapse, shows TD's performance, analyses other related issues.
Book review: Back from the Brink
fsim.ca/docs/backbrink.pdf
Mark Sibthorpe
This is a book review of the book Back from the Brink by Paul Halpern, Caroline Cakebread, Christopher C. Nicholls and Poonam Puri.
Footnote 151
fsim.ca/docs/footnote151.pdf
Mark Sibthorpe
Footnote 151 implies an important regulatory change related to derivative contracts. It means that US Banks will not be required to hold as much capital against commodities. If you want to understand the implications of this regulatory change in more detail, see the enclosed related article detailing the changes. For contextual purposes, I have also included two Rolling Stones Magazines reports from 2010 and 2014 that chronicle the role large US banks have played in manipulating commodities. You might question the credibility of these sources, but rest assured, these reports are based on United States Senate hearings which outline the issues in a 396 page report related to the implied risks.
Save the Canadian economy now
fsim.ca/docs/helecopter-money.pdf
Mark Sibthorpe
Consumer debt spending appears to have insulated Canada from the worst of the credit crisis, but now the alarming magnitude of consumer debt ($1.92-trillion) could exacerbate a day of reckoning.
This report assesses the issues at hand and recommends the solution to get Canada's economy on track.
Reasons financial service companies should consider gamification
fsim.ca/docs/GamingEventProposal-printsample--en-final.pdf
Mark Sibthorpe
Gamification of business processes resulted on Mint.com growing to 10 million users within 4 years. This report explains how.
National Bank Special Report
fsim.ca/docs/NatBSpec.pdf
Mark Sibthorpe
According to Bloomberg, National Bank of Canada will take a C$64 million ($48 million) restructuring charge in the fourth quarter and said its investment in Maple Financial Group Inc., which is being probed by German regulators, may be at risk of a “substantial loss.”
Will Canadian banks charge companies for deposits?
fsim.ca/docs/depgrowthimpact2.pdf
Mark Sibthorpe
In light of today’s possible rate cut, this report discusses how a bank rate cut and capital ratio pressure could precipitate negative corporate deposit interest rates in Canada.
Canadian Tire's (CTC) - Canadian Tire Financial Services (CTFS) Scotia deal overview and risk assess
fsim.ca/docs/ctfsfinal.pdf
Mark Sibthorpe
Review of the Canadian Tire Financial Services deal with Scotiabank, risks, opportunity and benefits.
Finance minisiter scorecard August 26, 2015
fsim.ca/docs/Scorejo-August-2015.pdf
Mark Sibthorpe
This report looks at Joe Oliver, minister of finance’s progress to date, and assigns a grade to his government’s performance to date.
Xtreme Branch
fsim.ca/docs/xbranch.pdf
Mark Sibthorpe
Branches are evolving to meet the digital age. This documents tracks the evolution with real-world examples.
Canadian Nudge
fsim.ca/docs/nudge.pdf
Mark Sibthorpe
CWB cause for concern
fsim.ca/docs/cwbupdate.pdf
Mark Sibthorpe
BNTV Overview
fsim.ca/docs/overviewpdf.pdf
BNTV
BankNews.TV Publishing Corp services overview document:
- Analytics
- Financial services industry monitor (FSIM) industry briefings and developments reports
- Research
Challenger banks not a threat to big banks
fsim.ca/docs/challenger.pdf
Mark Sibthorpe
This report looks at Canadian challenger banks (apart from merchant led banks) and explains why they have not threatened larger institutions. It also looks at ways in which these upstarts have achieved success.
Gamification of financial data project
fsim.ca/docs/GamingEventProposal-printsample--en-final_original.pdf
Mark Sibthorpe
This document contains details on how BankNews.TV is helping kids learn programming via gamification of financial data.
The impact a rate rise will have for Canadian banks
fsim.ca/docs/irr-f.pdf
Mark Sibthorpe
Canadian banks have made money throughout the credit crisis, but this trend may be about to reverse. The rational supporting this prediction is that revenue has grown despite a declining net interest margin (NIM). It has grown in spite of this fact because Canadian debt (loan lease volume) has risen significantly, as shown in chart 2.
FIFA: the new goldenballs
fsim.ca/docs/goldenballs.pdf
Mark Sibthorpe
Yesterday, the Attorney General of Switzerland (OAG) opened criminal proceedings related to the FIFA scandal. This report outlines some of the events related to the criminal investigation, with a particular focus on banking.
Scorecard Minister of Finance: JIm Flaherty
fsim.ca/docs/Scorecard Min Fin Flaherty April 8 2014.pdf
Mark Sibthorpe
March 18, Finance Minister Jim Flaherty resigned from cabinet after having endured a difficult year due to health issues. This report looks at his legacy and attempts to grade his government’s performance to date.
Merchants extend financial services
fsim.ca/docs/merchantfs.pdf
Mark Sibthorpe
Merchant led financial services are growing in importance once again. This is exemplified in the ongoing UK rivalry between ASDA, Sainsbury and Tesco. Together these merchant/financial service companies provide the backstop for three different approaches for merchants looking to extend their financial services.
Hot Money: real-estate
fsim.ca/docs/hotmoney.pdf
Mark Sibthorpe
Currency Cheat Sheet: a guide for the rest of us
fsim.ca/docs/currencycheatsheet.pdf
Mark Sibthorpe
Riches to Rags? Summary of possible risks for Genworth MI CANADA, INC.
fsim.ca/docs/gq4risk.pdf
Mark Sibthorpe
Genworth had its Q4 2014 earnings call. Genworth own about 30% of the mortgage default insurance in Canada. Not surprisingly, the earnings call became focussed on Alberta; and for good reason, with 20% of its outstanding insured mortgage balance in Alberta, sensitivity to the oil shock and how Genworth plan to manage related risks were discussed in detail.
Canadian Western Bank Competitive Forecast
fsim.ca/docs/cwbf.pdf
Mark Sibthorpe
Based on historical financial data (see detailed charts pages 5-8), the oil based recession in Alberta, and comparison against two of its peers, this document outlines my observation with respect to CWB’s future performances.
Liquid Canada: the tipping point
fsim.ca/docs/Liquid.pdf
Mark Sibthorpe
This report examines liquidity issues in the Canadian financial service industry.
Bank Fees
fsim.ca/docs/Bank fees.pdf
Mark Sibthorpe
Recently the CBC and The Globe and Mail both reported on what has been referred to as a consumer “bank fee outcry”. CBC compares banks to cable and phone companies, standing accused of trying to gouge customers with service fees. The backlash appears to have originated in conjunction with the NDP and the Consumers Council of Canada which argues that there is anxiety ‘among consumers about banking fees’.
Cheap Oil Report
fsim.ca/docs/co2.pdf
Canada's Economy, a strategic solution
fsim.ca/docs/ces.pdf
Mobile Payments Blueprint: guide to credit and loyalty transformation for merchants
fsim.ca/docs/booksample.pdf
Guide to system selection
fsim.ca/docs/gssnow.pdf
Read sample report: Guide to system selection. This sample would normally cost $99 but is available free as a sample. Click here view sample report.
News feed
AUSTRALIAN CENTRAL BANK CBDC RESEARCH HIGHLIGHTS LONG PATH TO ANY FUTURE DEPLOYMENT
Finextra (2023-12-23)
Operating in a ring-fenced environment and involving a digital currency that is a real claim on the Reserve Bank, 14 pilot projects with a range of industry participants investigated potential CBDC use cases.
INTERAC EXPANDING E-TRANSFER SERVICE, WEALTHSIMPLE TO JOIN
G&M (2023-09-28)
Interac Corp. is broadening the range of financial institutions that can participate in its e-transfer service, with financial services firm Wealthsimple as the first to become a new participant under the expansion.
HARSH REALITY OF ‘HIGHER-FOR-LONGER’ RATES LOOMS OVER U.S. STOCKS
G&M (2023-09-28)
As the Federal Reserve’s hawkish stance boosts Treasury yields and slams stocks, some investors are preparing for more pain ahead.
BLACKSTONE PRESIDENT SEES OPPORTUNITY IN TURMOIL
G&M - James Bradshaw (2023-09-28)
If you’re a CEO feeling stressed about debt, the president of US$1-trillion asset manager Blackstone Inc. ", " wants to hear from you.
18 CANADIAN REITS THAT OFFER SAFETY AND VALUE
G&M (2023-09-28)
The S&P/TSX Capped REIT Index has fallen over 20 per cent from its pandemic-era high in March, 2022 owing to spiking interest rates and bond yields. We thought we would take a contrarian approach and analyze the sector using our investment philosophy focused on safety and value in hopes of finding some bargains. Analysts on the Street are generally forecasting future cash flow growth and the sector may look even more attractive should rates begin to fall. Our analysis includes both property companies and real estate investment trusts (REITs) that hold assets in a variety of real estate segments, such as commercial, office, residential, industrial, etc.
THERE'S A 90% CHANCE OF A GOVERNMENT SHUTDOWN: GOLDMAN SACHS
Yahoo Finance - Ines Ferré and Ben Werschkul (2023-09-28)
On Tuesday evening, the Senate released what is likely a last-chance deal to avert a closure. The 79-page bill would keep the government open until Nov. 17. It is designed to allow more time for negotiations over a broader spending deal that Congress must pass before the end of the year.
NEW YORK REMAINS TOP FINANCIAL CENTRE, LONDON CLINGS TO SECOND PLACE - SURVEY
Yahoo Finance (2023-09-28)
New York has easily remained the world's top financial centre with London still second and gaining some ground, but also facing a tougher fight with Singapore and Hong Kong, the Global Financial Centres index showed on Thursday.
EVERGRANDE HALTS TRADING AFTER FOUNDER PUT UNDER POLICE CONTROL
Yahoo Finance (2023-09-28)
Evergrande Chairman Hui Ka Yan was taken away earlier this month and is being monitored at a designated location, people familiar with the matter said on Wednesday. It’s not clear why Hui is under so-called residential surveillance, a type of police action that falls short of formal detention or arrest and doesn’t mean Hui will be charged with a crime.
THE SCREEN STRUGGLE IS REAL AND TD BANK IS MAKING ITS SOLUTION FREE TO THE PUBLIC
FP - Denise Paglinawan (2023-09-28)
It includes features such as reading guides, adjustable font size, dark mode, a dyslexia-friendly font and monochrome mode. The tool changes what appears on the browser itself without using overlays and can coexist with other assistive technologies, such as stand-alone screen magnification software.
BRITAIN TO EASE CAPITAL RULES FOR RETAIL BANKS TO BOOST COMPETITION
Reuters - Huw Jones (2023-09-28)
Britain's finance ministry, which is seeking to boost competition in the banking sector, on Thursday proposed legislation to ease rules that require banks to "ring-fence" their retail arms with a capital reserve.
ODEY RECORDING, UBS PROBE & A REWILDING BET | BLOOMBERG DAYBREAK: EUROPE EDITION
Youtube - Podcast (2023-09-28)
Crispin Odey joked about his accusers and blamed the 'woke brigade' for the downfall. (2) The US Department of Justice has stepped up its probe of Credit Suisse & UBS on sanction breaches. (3) China Evergrande Group and its units have suspended trading in Hong Kong.
BLACKSTONE OFFICIALLY OPENS CANADIAN OFFICE IN TORONTO
Investment Executive - Mark Burgess (2023-09-28)
Brad Marshall, Blackstone’s global head of private credit strategies, was in Toronto Wednesday for the opening. He said the firm now has 10 people working in the Toronto office, a permanent space it moved into during the summer.
CANADA’S BANKING REGULATOR TO PROBE FOREIGN INTERFERENCE AT LENDERS
G&M (2023-09-27)
Canada’s banking regulator is expanding its mandate to begin probing issues of foreign interference and national-security issues at the country’s largest banks and insurers by early next year.
FEDS UNLOCK ANOTHER $20-BILLION FOR LOW-COST RENTAL CONSTRUCTION FINANCING, FREELAND SAYS
G&M (2023-09-27)
The federal government is unlocking another $20 billion in low-cost financing for the construction of rental housing across Canada, Finance Minister announced Tuesday.
SPRINTING STAR ANDRE DE GRASSE STEPS OUT OF HIS LANE FOR A NEW PURSUIT – BACKING STARTUPS
G&M (2023-09-27)
Canadian sprinter Andre De Grasse is moving into a new lane, backing startups through his newly formed company
JPMORGAN CHASE TO PAY $75M TO U.S. VIRGIN ISLANDS IN JEFFREY EPSTEIN SUIT
CBC (2023-09-27)
JPMorgan said its $75 million US settlement with the USVI includes $30 million to support charitable organizations, $25 million to strengthen law enforcement to combat human trafficking, and $20 million for attorney's fees.
CLASS ACTION AGAINST TORONTO REAL ESTATE INDUSTRY OVER COMMISSIONS GETS GREEN LIGHT
Yahoo Finance - Shantaé Campbell (2023-09-27)
The lawsuit, filed in April 2021 on behalf Toronto resident Mark Sunderland and anyone who sold a home in the GTA after 2010, alleges misconduct by several of the nation’s leading brokerages, including Century 21, Remax and IproRealty Ltd. The Canadian Real Estate Association (CREA) and the Toronto Regional Real Estate Board (TRREB) are also named in the lawsuit.
HOME PRICES IN US HIT RECORD HIGH, ERASING RECENT DECLINE
Yahoo Finance - Alicia Clanton (2023-09-27)
This year’s gains have offset the 5% decline in prices from last year’s peak in June 2022 to January 2023, when the market was slowing.
BANKS AND PRIVATE LENDERS VIE FOR $4.2 BILLION DEBT DEAL FOR ADEVINTA
Yahoo Finance - Silas Brown, Claire Ruckin and Eleanor Duncan (2023-09-27)
Adevinta last week said that it received a non-binding takeover proposal from a private equity consortium that includes Blackstone Inc. and Permira, confirming an earlier Bloomberg report revealing plans for what would be one of the year’s biggest buyouts.
EVERGRANDE CHAIRMAN UNDER POLICE WATCH; LIQUIDATION RISK MOUNTS
Reuters - Scott Murdoch, Julie Zhu and Rae Wee (2023-09-27)
The chairman of China Evergrande Group (3333.HK) has been placed under police surveillance, Bloomberg News reported on Wednesday, raising more doubts about the embattled developer's future as it grapples with mounting prospects of liquidation.
THE $300 TRILLION QUESTION
Bloomberg - Lucy White, Catarina Saraiva, and Swati Pandey (2023-09-27)
Ligaya Kelly worries her pet boarding facility on the outskirts of Los Angeles won’t survive the winter if loan costs keep rising. Economist Diana Mousina says she’ll have to sell her Sydney investment property if interest rates remain higher. John Stanyer has cut back plans for his holiday park in the north of England after his mortgage repayments almost tripled.
INSURERS CONTINUED PAYING RECORD BENEFITS IN YEAR THREE OF PANDEMIC
CLHIA (2023-09-27)
Insurers paid $114 billion in life and health benefits in 2022, slightly more than the previous record set in 2021 and $11 billion more than pre-pandemic levels, the Canadian Life and Health Insurance Association (CLHIA) said Tuesday in its annual statistics report.
FORMER WIRECARD MAN MARSALEK NAMED IN RUSSIA SPY CASE
Finextra (2023-09-27)
Marsalek has been on the run from police since the collapse of Wirecard in 2020 after the discovery of massive €1.9 billion black hole in its accounts. He is believed to have fled to Moscow and taken shelter under the protection of the protection of Russian army intelligence unit the GRU.
BIS CHIEF CALLS ON COUNTRIES TO MODERNISE LEGAL FRAMEWORKS TO SUPPORT CBDCS
Finextra (2023-09-27)
According to an IMF paper published in 2021, close to 80% of central banks are either not allowed to issue a digital currency under their existing laws, or the legal framework is unclear.
BANK OF ENGLAND HALTS RUN OF INTEREST RATE HIKES
G&M - Video (2023-09-26)
The Bank of England halted its long run of interest rate increases on Sept. 21 as the British economy slowed, but it said it was not taking a recent fall in inflation for granted.
THE BAD ECONOMIC TIMES HAVE ONLY JUST STARTED
CBC - Peter Armstrong (2023-09-26)
The Canadian economy is headed for a rough patch. Growth has already slowed considerably. Job growth has moderated. Inflation remains stubbornly high. But the pain households are feeling today is only going to get worse.
UAW FIGHT AGAINST BILLIONS IN BUYBACKS FORCES INVESTOR RETHINK
Yahoo Finance - Esha Dey (2023-09-26)
“The companies have room to go higher than their current offer,” said Patrick Kaser, a portfolio manager for Brandywine Global, which has a stake in GM as part of its $54 billion in assets under management as of June 30. “If they pause the buyback because they need to invest in an attractive longer-term plan, that is fine.”
AMERICAN EXPRESS’S STEVE SQUERI: ‘IF YOU’RE NOT READY FOR THE UPSWING, YOU’VE MISSED’
FT (2023-09-26)
“It was based on a philosophy that we were not playing a short-term game,” Squeri remembers. “In any downturn, there’s always an upswing. And if you’re not ready for the upswing, you’ve missed an opportunity to move ahead.”
PATERNITY LEAVE IN FINANCE: ‘THE MORE MEN DO IT, THE LESS OF A BIG DEAL IT BECOMES’
FT - Emma Jacobs (2023-09-26)
Shortly before his second stint of extended parental leave, City lawyer Adam was left embarrassed in front of clients when a senior partner asked why he was taking time off instead of his wife.
THE MASSIVE SCALE OF CHINA’S PROPERTY SECTOR
Reuters - Kripa Jayaram, Sumanta Sen, Pasit Kongkunakornkul and Jitesh Chowdhury (2023-09-26)
Country Garden’s risk of default rings alarm bells because of its size; It was the sector’s largest company by attributable sales, 356.9 billion yuan in 2022. It has 3,121 projects at different development stages across Mainland China, both commercial and residential.
The physical size of Country Garden’s real estate portfolio is enormous. As of the end of 2022, a total of 127.8 million sq. meters of gross floor area was under development, of which more than 60% was already sold.
Property sales by floor area in China fell by 7.1% between January and August of 2023 compared to the first eight months of last year. Investment completed by the real estate sector declined by 8.8% year-on-year, the second lowest since 1999. Funds raised by developers in the January-August period of this year fell by nearly 13%.
BANKS IN EU LARGELY COMPLY WITH 'BASEL ENDGAME', SAYS WATCHDOG
Reuters (2023-09-26)
Banks in the European Union already largely meet stricter global capital requirements ahead of a 2028 deadline, with the shortfall now down to 600 million euros ($635.8 million), the bloc's banking watchdog said on Tuesday.
US DOLLAR EMERGES AS BEST HAVEN FROM AMERICAN GOVERNMENT SHUTDOWN FEARS
Bloomberg - Garfield Reynolds (2023-09-26)
The greenback is once more proving it’s the only haven that matters.
DOLLAR GAINS HEAP PRESSURE ON EMERGING-MARKET STOCKS, CURRENCIES
Bloomberg - Andras Gergely (2023-09-26)
Emerging-market stocks fell to the lowest level since March as a strengthening dollar and elevated US yields damped investor appetite for riskier assets.
HALF OF CANADA’S YOUNG ADULTS GAVE UP ON HOMEOWNERSHIP: MORTGAGE PROS
Better Dwelling (2023-09-26)
Canadians are losing hope when it comes to buying a home. Nearly half (48%) of non-homeowners surveyed don’t see themselves ever being able to buy a home. It’s a sharp increase of 15 points compared to just six months ago, as Canada remains near its worst level of affordability ever.
SEC SANCTIONS DEUTSCHE BANK FOR GREENWASHING, AML VIOLATIONS
Investment Executive - James Langton (2023-09-26)
Without admitting or denying the regulator’s charges, DWS Investment Management Americas Inc. agreed to pay US$25 million to settle the charges: US$19 million for the greenwashing allegations and US$6 million for AML violations.
WHY THE U.S. JOB MARKET HAS DEFIED RISING RATES AND EXPECTATIONS OF HIGH UNEMPLOYMENT
Investment Executive - Christopher Rugaber (2023-09-26)
Yet so far, to widespread relief, the reality has been anything but: as interest rates have surged, inflation has tumbled from its peak of 9.1% in June 2022 to 3.7%. Yet the unemployment rate, at a still-low 3.8%, has scarcely budged since March 2022, when the Fed began imposing a series of 11 rate hikes at the fastest pace in decades.
MARKETS GIRD FOR HIGHER-FOR-LONGER RATES: MOODY’S
Investment Executive - James Langton (2023-09-26)
“In our view, interest rates will remain high, and the Fed will not be in a hurry to cut rates out of an abundance of caution,” Moody’s noted.
EVERGRANDE SHARES SINK AFTER SAYING IT IS UNABLE TO ISSUE NEW DEBT
G&M (2023-09-25)
Shares of China Evergrande plunged as much as 24% on Monday after the embattled developer said it was unable to issue new debt due to an ongoing investigation into one of its subsidiaries, dealing a fresh blow to its restructuring plans. “In view of Hengda Real Estate Group Co Ltd, a principal subsidiary of the company, being investigated, the group is unable to meet the qualifications for the issuance of new notes under the present circumstances,” Evergrande said in a statement late on Sunday.
DEAR BOOMING CHINESE ECONOMY OF THE PAST: BYE-BYE, THE WEST SHAN’T MISS YOU
G&M - John Rapley (2023-09-25)
After a summer filled with speculation about China’s sinking economy, recent news lifted some of the gloom. In reports that came out mid-September, both factory output and retail sales turned back up. Cue the celebrations that China is back and will lift the world economy, as it did after the 2008 financial crisis.
MONERIS NETWORK OUTAGE CAUSES WIDESPREAD DISRUPTION OF CREDIT, DEBIT PAYMENTS
CBC (2023-09-25)
Credit- and debit-processing firm Moneris confirmed it experienced a network outage on Saturday amid widespread reports of problems with customer payment terminals in several parts of Canada.
TRUDEAU EXPECTS CANADIAN INTEREST RATES TO COME DOWN BY MID 2024
Yahoo Finance (2023-09-25)
"We know things are going to start getting better. Inflation is coming down. We think interest rates are going to start coming down probably middle of next year," Trudeau told the New York Times in an interview just before returning to Canada after attending the United Nations General Assembly.
WHY TRADERS AREN'T BUYING THE FED'S 'HIGHER-FOR-LONGER' VISION
Yahoo Finance - Ann Saphir (2023-09-25)
Meanwhile, interest rate futures contracts continue to price in only about a 50% chance of further tightening in 2023, and see a 4.65% policy rate by the end of next year.
SWEDEN’S EMBATTLED SBB PLANS BREAK UP TO EASE FUNDING CRISIS
Yahoo Finance - Charles Daly and Anton Wilen (2023-09-25)
A deal with Canada’s Brookfield Asset Management Ltd. is the cornerstone of a break-up plan announced on Sunday by SBB Chief Executive Officer Leiv Synnes, who replaced embattled founder Ilija Batljan in June. While the agreement is complex, it shows that value can be extracted despite bonds markets being all but closed to the sector.
NATIONAL BANK CEO WARNS OF HARSH 'NEW REALITY' FOR FIXED-RATE MORTGAGE BORROWERS
FP - Christine Dobby and Mathieu Dion (2023-09-25)
SEC COLLECTS WALL STREET'S PRIVATE MESSAGES AS WHATSAPP PROBE ESCALATES
Reuters - Chris Prentice and Carolina Mandl (2023-09-25)
The U.S. securities regulator has collected thousands of staff messages from more than a dozen major investment companies, escalating its probe into Wall Street's use of private messaging apps, said four people with direct knowledge of the matter.
ITALY HAS NO BUYERS FOR MONTE DEI PASCHI, EYES SMALL SHARE SALES INSTEAD OF EXIT, SOURCES SAY
Reuters (2023-09-25)
Italy is unable to sell out of Monte dei Paschi di Siena (MPS) (BMPS.MI) in the near term because of a lack of interested buyers and may proceed instead by placing small blocks of shares on the market, two people close to the matter said on Friday.
CHINESE GOLD BUYING IS DRIVING A PARADIGM SHIFT IN BULLION
Bloomberg - Eddie Spence and Yvonne Yue Li (2023-09-25)
What determines the price of gold? For much of the past decade the answer was easy: the price of money. The lower rates fell, the higher gold climbed, and vice versa.
MERCEDES TRANSFORMS CAR INTO PAYMENT DEVICE
Finextra (2023-09-25)
Under the collaboration, customers will be able to use a fingerprint sensor in their car to make secure digital payments at more than 3,600 service stations in Germany.
REVOLUT LAUNCHES SWIFT CHALLENGER REVTAG
Finextra (2023-09-25)
Users of Revolut Business can make transactions by entering the RevTag of an individual or business in the Revolut Business app, without using IBANs or additional beneficiary details. The feature is free and provides businesses with the ability to pay employees and contractors in over 150 countries and regions around the world.
CPP BOARD DISPUTES MATH BEHIND ALBERTA’S BID TO WITHDRAW FROM NATIONAL PENSION FUND
G&M - James Bradshaw, Carrie Tait (2023-09-22)
The Canada Pension Plan’s investment arm said Alberta’s claim that it could withdraw more than half of the national pension fund’s assets is based on “an invented formula” that is divorced from reality, sharply criticizing the math behind Premier Danielle Smith’s push to set up an alternative provincial pension system.
DEMOGRAPHICS, NOT THE BANK OF CANADA, WILL DRIVE INTEREST RATES HIGHER FOR LONGER
G&M (2023-09-22)
Many investors breathed a sigh of relief when the Bank of Canada chose to leave the benchmark lending rate unchanged at 5 per cent at its meeting on Sept. 6. But that hasn’t stopped the speculation as to whether the next move will be up or down, and the timing of that move.
"FRAUD IN AUTO, CREDIT CARD AND MORTGAGE SECTORS HAS RISEN AMID INTEREST RATE HIKES: STUDY
G&M (2023-09-22)
New data suggests an uptick in fraud in the auto, credit card and mortgage sectors is driven by growing financial pressures on consumers and by fraudsters using bold schemes. An Equifax Canada report shows fraud in the automotive sector has surged 28 per cent, year-over-year, while the credit cards saw a jump of 37.9 per cent. The mortgage sector saw an 18.8 per cent increase in the fraud rate.
AS ‘PERFECT STORM’ PUSHES MORE TO THE BRINK, HERE’S WHAT TO KNOW ABOUT BANKRUPTCY
G&M (2023-09-22)
With Canadians’ debt on the rise as they deal with surging prices and interest rates, experts say many people are in the dark about the insolvency process, even though it could help those in dire straits get a clean slate.
LOWEST FIXED AND VARIABLE MORTGAGE RATES IN CANADA FOR SEPTEMBER 21 2023
G&M (2023-09-22)
It was another week where Canada’s leading nationally advertised mortgage rates did absolutely nothing.", "Yet.", "Fixed rates are in imminent danger of climbing because of inflation chugging an energy drink and unexpectedly surging back to 4 per cent. .
U.S. FED HOLDS BENCHMARK INTEREST RATE STEADY — BUT HINTS ANOTHER HIKE IS COMING
CBC (2023-09-22)
But from there the Fed's updated quarterly projections show rates falling only half a percentage point in 2024 compared to the full percentage point of cuts anticipated at the meeting in June. With the federal funds rate falling to 5.1 per cent by the end of 2024 and 3.9 per cent by the end of 2025, the central bank's main measure of inflation is projected to drop to 3.3 per cent by the end of this year, to 2.5 per cent next year and to 2.2 per cent by the end of 2025.
FED IS CUTTING STAFF AFTER MORE THAN A DECADE OF PAYROLL GROWTH
Yahoo Finance - Howard Schneider (2023-09-22)
A Fed spokesperson said the cuts are focused on the staff of the U.S. central bank's 12 regional reserve banks and mainly hit information technology jobs, including some no longer needed because of the spread of cloud-based computer software, and positions connected to the Fed's various systems for processing payments, which are being consolidated.
COOLING AI BOOM DRIVES $14 BILLION OUTFLOW FROM TAIWAN STOCKS
Yahoo Finance - Jenny Yu, Chien-Hua Wan (2023-09-22)
The selloff has weighed on the Taiwanese dollar, which has depreciated more than 3% this quarter, the worst performance in Asia for the current quarter. Taiwan’s central bank said Thursday that the local currency has been under heavy pressure amid foreign outflows and withdrawal of dividends since early August.
RBC PROCEEDS WITH JOB CUTS ON U.S., CANADA CAPITAL MARKETS DESKS
FP - Esteban Duarte and Paula Sambo (2023-09-22)
CANADIAN UNEMPLOYMENT CLAIMS RIP TO 2008 HIGH, DISQUALIFICATIONS SOAR
Better Dwelling (2023-09-22)
The nearly 10-point annual growth observed is unusually high for the month. Excluding 2020, the last July to climb this much was back in 2016, post-Oil Patch recession. There’s a big difference between then and now though—this isn’t a recession. In theory, Canada is just above its record low unemployment. It’s an unusual combination, to say the least.
ALBERTA DESERVES MORE THAN HALF CPP ASSETS IF IT EXITS PROGRAM: REPORT
Investment Executive (2023-09-22)
A third-party report compiled by consultant Lifeworks released Thursday calculates that if Alberta gave the required three-year notice to quit CPP next year, it would be entitled to $334 billion, or about 53%, of the national pension plan’s pool by 2027.
"FINANCIAL UNCERTAINTY HAS BECOME NEW NORMAL FOR MANY CANADIANS, RBC SURVEY SUGGESTS
G&M (2023-09-21)
A new RBC survey suggests financial uncertainty has become the new normal for many Canadians as inflation eats into their savings and hampers their future financial security.", "The rising cost of living tops Canadians’ list of worries, according to the poll, with 77 per cent of respondents saying they are not able to save as much as they would like to and roughly half saying they’ve never been more stressed about money.
MILES NADAL’S TINY FAMILY OF FUNDS: EXPENSIVE, UNDERPERFORMING, AND TARGETED BY ACTIVISTS
G&M (2023-09-21)
You may not have heard of a small outfit called Artemis Investment Management Ltd. but you likely have heard of its owner, Miles Nadal – philanthropist, entrepreneur and former CEO of public company MDC Partners, where he resigned after U.S. regulators accused him in 2017 of collecting millions in undisclosed perks.
AIR CANADA SAYS UNAUTHORIZED GROUP BREACHED EMPLOYEE DATA, HACKED INTERNAL SYSTEM
G&M - Temur Durrani (2023-09-21)
Air Canada says an unauthorized group of people obtained access to its internal system, compromising the personal information of an unknown number of employees working for the country’s largest airline.
U.S. FEDERAL RESERVE HOLDS RATES STEADY, BUT SIGNALS ONE MORE HIKE THIS YEAR
G&M (2023-09-21)
U.S. Federal Reserve officials on Wednesday, but signalled support for one more rate increase this year and fewer rate cuts next year as the American economy proves more resilient than expected.
WE'RE CALLING BULL ON THE 'NEW BULL MARKET'
FP - David Rosenberg (2023-09-21)
This year’s rally was purely driven by factors that tend to be brief in nature and non-fundamental, as in technicals, sentiment (animal spirits) and short covering. At true lows in the bear market cycle, we tend to see breadth improve much more forcefully than has been the case so far; we tend to see financials and the cyclical sectors outperform, and this has definitely not happened; and the small caps start to take leadership in a sign that investors are beginning to discount a return to accelerating economic growth. The same holds true for emerging-market equities as they too are a torque on improving economic growth — and that hasn’t happened either.
BOE RATE HIKE ON KNIFE EDGE AFTER INFLATION FALL
Bloomberg - Lucy White and Greg Ritchie (2023-09-21)
Bank of England policy makers will decide on Thursday whether to call a halt to a string of 14 consecutive interest-rate increases, with investors and handful of economists raising doubts about another hike.
ONTARIO REAL ESTATE INDUSTRY WANTS STUDENT LOAN FORGIVENESS…FOR DOWNPAYMENTS
Better Dwelling (2023-09-21)
Key findings include insights on outstanding credit and home-buying intentions. Students with more than $5,000 in student debt tend to claim the debt makes it difficult to save for a home. Students with debt hold about $14,500 on average, and most plan to repay it within 5 years.
BANK OF CANADA WATCHING ITS WORDS TO AVOID RATE CUT SPECULATION, SUMMARY REVEALS
Investment Executive (2023-09-21)
Though the latest inflation reading shows price growth heading in the wrong direction, the central bank is also keeping an eye on other economic indicators.
CANADA’S INFLATION RATE RISES TO 4% IN AUGUST, PUTTING PRESSURE ON BOC
G&M (2023-09-20)
Canada’s annual inflation rate accelerated sharply for the second month in a row, raising the odds that the Bank of Canada could deliver at least one more interest rate increase this year despite hitting pause on monetary policy tightening earlier this month.
IN SPLITTING FROM CPA CANADA, ONTARIO AND QUEBEC BODIES TREAT MEMBERS LIKE CHILDREN
G&M (2023-09-20)
In 1955 Pete Seeger wrote the classic folk song 'Replace “Flowers” with “Leaders” and the song, which is a meditation on death, aptly describes the current state of the leadership of the Canadian Chartered Professional Accountants profession where, if not death, there is a certainly an apparent dearth of leadership.
ANNUAL PACE OF HOUSING STARTS IN CANADA DOWN 1% IN AUGUST
G&M (2023-09-20)
Canada Mortgage and Housing Corp. says the annual pace of housing starts in Canada edged down one per cent in August compared with July.
HOW RECHIE VALDEZ WENT FROM BANKER TO BAKER TO SMALL BUSINESS MINISTER
G&M - Governance (2023-09-20)
In early 2020, Rechie Valdez made a decision. She would leave the banking industry, where she had worked for more than 15 years, to focus full time on her small business: baking desserts and wedding cakes.
"RBC HIRES EXECUTIVE CHAIR FOR U.S. BANK CITY NATIONAL WHO WILL REPORT DIRECTLY TO CEO
G&M (2023-09-20)
Greg Carmichael, the former chief executive officer of U.S. regional lender Fifth Third Bancorp, is set to join RBC in October. While he will technically sit on City National’s board of directors, he will report directly to RBC CEO Dave McKay.
ONTARIO TEACHERS’ PENSION PLAN CHIEF INVESTMENT OFFICER TO DEPART AT THE END OF DECEMBER
G&M - James Bradshaw (2023-09-20)
Chief investment officer Ziad Hindo is leaving the pension fund manager at the end of the year after five years in the role.
CREDIT CARD BALANCE TRANSFERS: A FANTASTIC DEAL, BUT NOT A SOLUTION TO YOUR DEBT WOES
G&M (2023-09-20)
Balance transfers, which offer interest-free promotional periods for new customers who shift over their debt, offer a good option for consumers facing large bills as interest rates rise.
WANT A THREE PERCENT MORTGAGE RATE? GIVE ASSUMABLE MORTGAGES A LOOK
Yahoo Finance - Eyek Ntekim and Akiko Fujita (2023-09-20)
Roam CEO Raunaq Singh suggests buyers and sellers take a look at assumable loans. Assumable loans, according to Singh, are loans in which the buyers "take over the interest rate that the seller currently has." In other words, the rates that the seller paid are the same rates the new buyer will pay. This, according to Singh allow for more affordability and increases opportunities for sellers. Roam takes 1% of purchase price from each sale made through their site.
DEUTSCHE BANK PROMISES NEW STEPS TO RECTIFY POSTBANK'S SERVICE COMPLAINTS
Yahoo Finance - Tom Sims (2023-09-20)
The comments by Christian Sewing, Germany's top banker, come after its financial regulator termed as "unacceptable" the disruptions experienced in Postbank's online offerings, the difficulty clients had in reaching its customer service and in the long processing times.
UK WATCHDOG SETS THREE-MONTH DEADLINE TO IMPROVE CAR INSURANCE
Reuters - Huw Jones (2023-09-20)
Britain's financial watchdog has told motor insurers they have three months to improve the value they give customers in products that top up coverage, or face potential sanctions.
RUSSIA BECOMES UAE’S TOP GOLD SOURCE AFTER BEING SHUT OUT OF WEST
Bloomberg - Eddie Spence (2023-09-20)
Russia became the United Arab Emirates’ top source of gold last year after Western countries imposed sanctions on supplies following the Kremlin’s invasion of Ukraine.
CANADA NO LONGER HAS THE LOWEST INFLATION IN THE G7, SET TO ACCELERATE
Better Dwelling (2023-09-20)
Porter sees this applying more pressure on the central bank. “Things just got a lot more interesting for the Bank of Canada, and most definitely not in a good way. We all knew that the extended back-up in gasoline prices was going to be a headache for headline CPI and inflation expectations, but the inconvenient truth is that core has suddenly heated up as well,” he said.
FORMER U.S. CONGRESSMAN GETS JAIL FOR INSIDER TRADING
Investment Executive - James Langton (2023-09-20)
According to evidence presented in court, Buyer traded with advance knowledge of the 2018 merger of telecom giants Sprint Corp. and T-Mobile US Inc. after learning of the planned deal from T-Mobile executives.
HOUSING MARKET SLOWS IN AUGUST, REPORTED PRICE DECLINES EXAGGERATES WEAKNESS
Central 1 - Brian Yu (2023-09-19)
The combination of rate hikes, fi nancial stress, and uncertainty are curbing household demand for real estate, but declining sales were not universal among provinces. British Columbia, which is more interest rate sensitive given high household debt and high home values, recorded a 10.7 per cent plunge in sales which was the steepest among provinces and pushed sales to the lowest level since March. Ontario (-6.2 per cent) and Quebec (-4.9 per cent) also reported signifi cant declines.
FORMER GOLDMAN COMMODITIES CHIEF JOINS CANADIAN COMPANY PLANNING TO LAUNCH TRANSITION-FOCUSED FUTURES
G&M - Jeffrey Jones (2023-09-19)
Abaxx, which counts mining financier Robert Friedland as a backer, is nearing regulatory approval to begin its trading operations in Singapore, where it is creating futures contracts for liquefied natural gas, carbon offsets and nickel sulphate, a material used in the manufacture of batteries.
BMO SHUTTING DOWN INDIRECT RETAIL AUTO FINANCE BUSINESS AS BAD DEBTS MOUNT
CBC (2023-09-19)
The bank, which announced the move on Saturday, has conducted this business in Canada and the United States. The move comes after BMO's overall bad debt provisions rose to $492 million, compared with $136 million a year earlier, for the quarter ended July 31 in a sign of growing stress consumers face from a rapid rise in borrowing costs.
WHY THE BANK OF CANADA PAUSE WON'T SAVE THE HOUSING MARKET THIS TIME
Yahoo Finance - Pamela Heaven (2023-09-19)
Now new listings are surging back to historic norms, up 5.5 per cent in August from last year, and there’s a record number of homes under construction that will make their way onto the market, he said.
THE $300-TRILLION QUESTION: ARE HIGHER INTEREST RATES HERE TO STAY?
FP - Lucy White (2023-09-19)
Ligaya Kelly worries her pet boarding facility on the outskirts of Los Angeles won’t survive the winter if loan costs keep rising. Economist Diana Mousina says she’ll have to sell her Sydney investment property if interest rates remain higher. John Stanyer has cut back plans for his holiday park in the north of England after his mortgage repayments almost tripled.
GRAFT ACCUSATIONS DOG TOP ZELENSKIY AIDES
Reuters (2023-09-19)
In his years as the chief executive of one of Ukraine's biggest construction firms, Oleh Maiboroda kept rolls of dollar bills in a safe behind his desk.
DEUTSCHE BANK'S PROBLEMS AT POSTBANK UNIT ARE 'UNACCEPTABLE', REGULATOR SAYS
Reuters (2023-09-19)
Germany's top financial regulator has called problems affecting customers at Deutsche Bank's (DBKGn.DE) Postbank unit "unacceptable", two weeks after the agency issued an unusual rebuke of the lender.
CANADIAN NEW HOME CONSTRUCTION PULLS BACK, EXPECTED TO PULL BACK FURTHER
Better Dwelling (2023-09-19)
Canada has seen the new housing construction starts take a dip on the back of weak demand. The seasonally adjusted annual rate (SAAR) of new home starts fell 1% to 253k units in July. Construction starts for urban housing fell 1%, with urban multi-unit construction falling 1.4%, pulling down the 1.7% increase when it came to single-detached urban starts.
REGULATORS MULL REDEMPTION FEES FOR INVESTORS WHO SELL DURING MARKET STRESS
Investment Executive - James Langton (2023-09-19)
When sellers don’t have to “bear the costs of liquidity” when redeeming units, the remaining investors are disadvantaged, a report from IOSCO stated.
REPORT CARD ON BANKS 2023 MAIN CHART
Investment Executive (2023-09-19)
Detailed report on Canadian banks with coverage of issues such as how advisors rate their banks, salaries and other issues related to competitive issues between banks.
HOW AI IS SUPERCHARGING FINANCIAL FRAUD–AND MAKING IT HARDER TO SPOT
Forbes (2023-09-19)
I wanted to inform you that Chase owes you a refund of $2,000. To expedite the process and ensure you receive your refund as soon as possible, please follow the instructions below: 1. Call Chase Customer Service at 1-800-953-XXXX to inquire about the status of your refund. Be sure to have your account details and any relevant information ready …”
BIG SIX BANKS OPEN TO REFINANCING CEBA LOANS FOR SMALL BUSINESSES
G&M - Chris Hannay (2023-09-18)
The Big Six banks say they are open to refinancing Canada Emergency Business Account loans for small businesses, though they provided few details and say new terms will have to be decided on a case-by-case basis.
CHINA EVERGRANDE SHARES TUMBLE 25 PER CENT AFTER WEALTH MANAGEMENT STAFF DETAINED
G&M (2023-09-18)
Shares of embattled developer China Evergrande Group plunged 25 per cent on Monday after police detained some staff at its wealth management unit, suggesting a new investigation that could add to the property company’s woes.
BANK OF MONTREAL WINDS DOWN ITS RETAIL AUTO FINANCE BUSINESS, SHIFTS FOCUS TO OTHER AREAS
G&M (2023-09-18)
is exiting a segment of the auto loan business dominated by two rivals, a move at the country’s third-largest lender that reflects a drive to cut costs and limit exposure to one consumer debt sector,
NEW CREDIT-CARD OFFERS TARGET A FINANCIALLY STRESSED CUSTOMER BASE, NOT BIG SPENDERS
G&M (2023-09-18)
A study by American Express Canada shows that more credit-card holders are redeeming points for groceries than travel, and it’s not even close.
CANADA'S HOUSING CRISIS WILL TAKE YEARS TO SOLVE -FINANCE MINISTER
Yahoo Finance (2023-09-18)
An affordable housing crisis that is hurting the Canadian government's popularity will take years to resolve, even if construction hits an 80-year high, Finance Minister Chrystia Freeland said on Saturday.
FED EXPECTED TO HOLD RATES STEADY WHILE KEEPING DOOR OPEN TO MORE HIKES
Yahoo Finance - Jennifer Schonberger (2023-09-18)
"They are being very risk averse and they're still worried about making the mistake of the 1970s of letting inflation go back up," said Wilmington Trust chief economist Luke Tilley. "They don't want the market to take any kind of signal of dovishness and run with it. They need to keep financial conditions tight."
A TALE OF TWO CENTRAL BANKS AS URUGUAY RISES AND ARGENTINA SLIDES
Yahoo Finance - Lucinda Elliot (2023-09-18)
Diego Labat, Uruguay's central bank chief, is sitting pretty. Inflation is at the lowest level in nearly two decades, the currency is one of the region's strongest, and the country is leading a regional pivot towards interest rate easing.
'EVERYBODY SHOULD JUST SHUT UP': BANK OF CANADA'S INDEPENDENCE UNDER PRESSURE FROM POLITICAL COMMENTS
FP - Gigi Suhanic (2023-09-18)
The Bank of Canada is supposed to be free from government interference, but elected officials have become more vocal about interest rates, inflation and the effect on their citizens, leaving some experts fretting about the central bank’s independence when it comes to monetary policy.
CANADIAN WESTERN BANK GROWS IN CHALLENGING TIMES
FP - Larysa Harapyn (2023-09-18)
Chris Fowler, chief executive, Canadian Western Bank talks with Financial Post’s Larysa Harapyn about how CWB is growing in challenging times. He discusses the impact of higher interest rates on businesses and more.
HOME PRICES LEVELLING OFF AS SALES SLOW, LISTINGS REBOUND: CREA
FP - Denise Paglanawan (2023-09-18)
Average home prices rose slightly in August, up 0.4 per cent, while sales slowed and new listings returned to more normal levels, a sign that demand and supply are continuing to come into better balance, according to monthly data released by the Canadian Real Estate Association.
CANADA POSTPONES TRADE MISSION TO INDIA WITH TENSIONS ON RISE
Bloomberg - Brian Platt (2023-09-18)
Canada is postponing a trade mission to India that was planned for early October, a move that comes as broader trade talks between the two countries have stalled.
MEET THE WOMAN VYING TO TAKE THE REINS OF NEW ZEALAND’S ECONOMY
Bloomberg - Ainsley Thomson (2023-09-18)
In practice debates before previous New Zealand elections, Nicola Willis used to play the role of formidable female politicians.
FOREIGN INVESTORS STAY HUNGRY FOR CANADIAN DEBT
Investment Executive - James Langton (2023-09-18)
The national statistical agency reported that foreign investment in Canadian securities came in at $11.6 billion in July — led by $10.3 billion in corporate bonds and $5.2 billion of government bonds amid rising interest rates.
HSBC TO OFFER CREDIT CARDS TO MIGRANTS WITH NO UK CREDIT HISTORY
Finextra (2023-09-18)
The bank has teamed up with international credit bureau Nova Credit, which offers data on credit history from 12 overseas countries, including Australia, Brazil, Canada, Dominican Republic, India, Kenya, Mexico, Nigeria, Philippines, Spain, Switzerland, and the US.
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AUSTRALIAN CENTRAL BANK CBDC RESEARCH HIGHLIGHTS LONG PATH TO ANY FUTURE DEPLOYMENT
Finextra (2023-12-23)
Operating in a ring-fenced environment and involving a digital currency that is a real claim on the Reserve Bank, 14 pilot projects with a range of industry participants investigated potential CBDC use cases.
INTERAC EXPANDING E-TRANSFER SERVICE, WEALTHSIMPLE TO JOIN
G&M (2023-09-28)
Interac Corp. is broadening the range of financial institutions that can participate in its e-transfer service, with financial services firm Wealthsimple as the first to become a new participant under the expansion.
HARSH REALITY OF ‘HIGHER-FOR-LONGER’ RATES LOOMS OVER U.S. STOCKS
G&M (2023-09-28)
As the Federal Reserve’s hawkish stance boosts Treasury yields and slams stocks, some investors are preparing for more pain ahead.
BLACKSTONE PRESIDENT SEES OPPORTUNITY IN TURMOIL
G&M - James Bradshaw (2023-09-28)
If you’re a CEO feeling stressed about debt, the president of US$1-trillion asset manager Blackstone Inc. ", " wants to hear from you.
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AUSTRALIAN CENTRAL BANK CBDC RESEARCH HIGHLIGHTS LONG PATH TO ANY FUTURE DEPLOYMENT
Finextra (2023-12-23)
Operating in a ring-fenced environment and involving a digital currency that is a real claim on the Reserve Bank, 14 pilot projects with a range of industry participants investigated potential CBDC use cases.
18 CANADIAN REITS THAT OFFER SAFETY AND VALUE
G&M (2023-09-28)
The S&P/TSX Capped REIT Index has fallen over 20 per cent from its pandemic-era high in March, 2022 owing to spiking interest rates and bond yields. We thought we would take a contrarian approach and analyze the sector using our investment philosophy focused on safety and value in hopes of finding some bargains. Analysts on the Street are generally forecasting future cash flow growth and the sector may look even more attractive should rates begin to fall. Our analysis includes both property companies and real estate investment trusts (REITs) that hold assets in a variety of real estate segments, such as commercial, office, residential, industrial, etc.
EVERGRANDE HALTS TRADING AFTER FOUNDER PUT UNDER POLICE CONTROL
Yahoo Finance (2023-09-28)
Evergrande Chairman Hui Ka Yan was taken away earlier this month and is being monitored at a designated location, people familiar with the matter said on Wednesday. It’s not clear why Hui is under so-called residential surveillance, a type of police action that falls short of formal detention or arrest and doesn’t mean Hui will be charged with a crime.
CANADA’S BANKING REGULATOR TO PROBE FOREIGN INTERFERENCE AT LENDERS
G&M (2023-09-27)
Canada’s banking regulator is expanding its mandate to begin probing issues of foreign interference and national-security issues at the country’s largest banks and insurers by early next year.
FEDS UNLOCK ANOTHER $20-BILLION FOR LOW-COST RENTAL CONSTRUCTION FINANCING, FREELAND SAYS
G&M (2023-09-27)
The federal government is unlocking another $20 billion in low-cost financing for the construction of rental housing across Canada, Finance Minister announced Tuesday.
CLASS ACTION AGAINST TORONTO REAL ESTATE INDUSTRY OVER COMMISSIONS GETS GREEN LIGHT
Yahoo Finance - Shantaé Campbell (2023-09-27)
The lawsuit, filed in April 2021 on behalf Toronto resident Mark Sunderland and anyone who sold a home in the GTA after 2010, alleges misconduct by several of the nation’s leading brokerages, including Century 21, Remax and IproRealty Ltd. The Canadian Real Estate Association (CREA) and the Toronto Regional Real Estate Board (TRREB) are also named in the lawsuit.
HOME PRICES IN US HIT RECORD HIGH, ERASING RECENT DECLINE
Yahoo Finance - Alicia Clanton (2023-09-27)
This year’s gains have offset the 5% decline in prices from last year’s peak in June 2022 to January 2023, when the market was slowing.
EVERGRANDE CHAIRMAN UNDER POLICE WATCH; LIQUIDATION RISK MOUNTS
Reuters - Scott Murdoch, Julie Zhu and Rae Wee (2023-09-27)
The chairman of China Evergrande Group (3333.HK) has been placed under police surveillance, Bloomberg News reported on Wednesday, raising more doubts about the embattled developer's future as it grapples with mounting prospects of liquidation.
THE $300 TRILLION QUESTION
Bloomberg - Lucy White, Catarina Saraiva, and Swati Pandey (2023-09-27)
Ligaya Kelly worries her pet boarding facility on the outskirts of Los Angeles won’t survive the winter if loan costs keep rising. Economist Diana Mousina says she’ll have to sell her Sydney investment property if interest rates remain higher. John Stanyer has cut back plans for his holiday park in the north of England after his mortgage repayments almost tripled.
FORMER WIRECARD MAN MARSALEK NAMED IN RUSSIA SPY CASE
Finextra (2023-09-27)
Marsalek has been on the run from police since the collapse of Wirecard in 2020 after the discovery of massive €1.9 billion black hole in its accounts. He is believed to have fled to Moscow and taken shelter under the protection of the protection of Russian army intelligence unit the GRU.
BIS CHIEF CALLS ON COUNTRIES TO MODERNISE LEGAL FRAMEWORKS TO SUPPORT CBDCS
Finextra (2023-09-27)
According to an IMF paper published in 2021, close to 80% of central banks are either not allowed to issue a digital currency under their existing laws, or the legal framework is unclear.
BANK OF ENGLAND HALTS RUN OF INTEREST RATE HIKES
G&M - Video (2023-09-26)
The Bank of England halted its long run of interest rate increases on Sept. 21 as the British economy slowed, but it said it was not taking a recent fall in inflation for granted.
HALF OF CANADA’S YOUNG ADULTS GAVE UP ON HOMEOWNERSHIP: MORTGAGE PROS
Better Dwelling (2023-09-26)
Canadians are losing hope when it comes to buying a home. Nearly half (48%) of non-homeowners surveyed don’t see themselves ever being able to buy a home. It’s a sharp increase of 15 points compared to just six months ago, as Canada remains near its worst level of affordability ever.
MARKETS GIRD FOR HIGHER-FOR-LONGER RATES: MOODY’S
Investment Executive - James Langton (2023-09-26)
“In our view, interest rates will remain high, and the Fed will not be in a hurry to cut rates out of an abundance of caution,” Moody’s noted.
EVERGRANDE SHARES SINK AFTER SAYING IT IS UNABLE TO ISSUE NEW DEBT
G&M (2023-09-25)
Shares of China Evergrande plunged as much as 24% on Monday after the embattled developer said it was unable to issue new debt due to an ongoing investigation into one of its subsidiaries, dealing a fresh blow to its restructuring plans. “In view of Hengda Real Estate Group Co Ltd, a principal subsidiary of the company, being investigated, the group is unable to meet the qualifications for the issuance of new notes under the present circumstances,” Evergrande said in a statement late on Sunday.
DEAR BOOMING CHINESE ECONOMY OF THE PAST: BYE-BYE, THE WEST SHAN’T MISS YOU
G&M - John Rapley (2023-09-25)
After a summer filled with speculation about China’s sinking economy, recent news lifted some of the gloom. In reports that came out mid-September, both factory output and retail sales turned back up. Cue the celebrations that China is back and will lift the world economy, as it did after the 2008 financial crisis.
WHY TRADERS AREN'T BUYING THE FED'S 'HIGHER-FOR-LONGER' VISION
Yahoo Finance - Ann Saphir (2023-09-25)
Meanwhile, interest rate futures contracts continue to price in only about a 50% chance of further tightening in 2023, and see a 4.65% policy rate by the end of next year.
NATIONAL BANK CEO WARNS OF HARSH 'NEW REALITY' FOR FIXED-RATE MORTGAGE BORROWERS
FP - Christine Dobby and Mathieu Dion (2023-09-25)
CPP BOARD DISPUTES MATH BEHIND ALBERTA’S BID TO WITHDRAW FROM NATIONAL PENSION FUND
G&M - James Bradshaw, Carrie Tait (2023-09-22)
The Canada Pension Plan’s investment arm said Alberta’s claim that it could withdraw more than half of the national pension fund’s assets is based on “an invented formula” that is divorced from reality, sharply criticizing the math behind Premier Danielle Smith’s push to set up an alternative provincial pension system.
LOWEST FIXED AND VARIABLE MORTGAGE RATES IN CANADA FOR SEPTEMBER 21 2023
G&M (2023-09-22)
It was another week where Canada’s leading nationally advertised mortgage rates did absolutely nothing.", "Yet.", "Fixed rates are in imminent danger of climbing because of inflation chugging an energy drink and unexpectedly surging back to 4 per cent. .
U.S. FED HOLDS BENCHMARK INTEREST RATE STEADY — BUT HINTS ANOTHER HIKE IS COMING
CBC (2023-09-22)
But from there the Fed's updated quarterly projections show rates falling only half a percentage point in 2024 compared to the full percentage point of cuts anticipated at the meeting in June. With the federal funds rate falling to 5.1 per cent by the end of 2024 and 3.9 per cent by the end of 2025, the central bank's main measure of inflation is projected to drop to 3.3 per cent by the end of this year, to 2.5 per cent next year and to 2.2 per cent by the end of 2025.
ALBERTA DESERVES MORE THAN HALF CPP ASSETS IF IT EXITS PROGRAM: REPORT
Investment Executive (2023-09-22)
A third-party report compiled by consultant Lifeworks released Thursday calculates that if Alberta gave the required three-year notice to quit CPP next year, it would be entitled to $334 billion, or about 53%, of the national pension plan’s pool by 2027.
BOE RATE HIKE ON KNIFE EDGE AFTER INFLATION FALL
Bloomberg - Lucy White and Greg Ritchie (2023-09-21)
Bank of England policy makers will decide on Thursday whether to call a halt to a string of 14 consecutive interest-rate increases, with investors and handful of economists raising doubts about another hike.
ONTARIO REAL ESTATE INDUSTRY WANTS STUDENT LOAN FORGIVENESS…FOR DOWNPAYMENTS
Better Dwelling (2023-09-21)
Key findings include insights on outstanding credit and home-buying intentions. Students with more than $5,000 in student debt tend to claim the debt makes it difficult to save for a home. Students with debt hold about $14,500 on average, and most plan to repay it within 5 years.
BANK OF CANADA WATCHING ITS WORDS TO AVOID RATE CUT SPECULATION, SUMMARY REVEALS
Investment Executive (2023-09-21)
Though the latest inflation reading shows price growth heading in the wrong direction, the central bank is also keeping an eye on other economic indicators.
CANADA’S INFLATION RATE RISES TO 4% IN AUGUST, PUTTING PRESSURE ON BOC
G&M (2023-09-20)
Canada’s annual inflation rate accelerated sharply for the second month in a row, raising the odds that the Bank of Canada could deliver at least one more interest rate increase this year despite hitting pause on monetary policy tightening earlier this month.
ANNUAL PACE OF HOUSING STARTS IN CANADA DOWN 1% IN AUGUST
G&M (2023-09-20)
Canada Mortgage and Housing Corp. says the annual pace of housing starts in Canada edged down one per cent in August compared with July.
HOW RECHIE VALDEZ WENT FROM BANKER TO BAKER TO SMALL BUSINESS MINISTER
G&M - Governance (2023-09-20)
In early 2020, Rechie Valdez made a decision. She would leave the banking industry, where she had worked for more than 15 years, to focus full time on her small business: baking desserts and wedding cakes.
WANT A THREE PERCENT MORTGAGE RATE? GIVE ASSUMABLE MORTGAGES A LOOK
Yahoo Finance - Eyek Ntekim and Akiko Fujita (2023-09-20)
Roam CEO Raunaq Singh suggests buyers and sellers take a look at assumable loans. Assumable loans, according to Singh, are loans in which the buyers "take over the interest rate that the seller currently has." In other words, the rates that the seller paid are the same rates the new buyer will pay. This, according to Singh allow for more affordability and increases opportunities for sellers. Roam takes 1% of purchase price from each sale made through their site.
FORMER U.S. CONGRESSMAN GETS JAIL FOR INSIDER TRADING
Investment Executive - James Langton (2023-09-20)
According to evidence presented in court, Buyer traded with advance knowledge of the 2018 merger of telecom giants Sprint Corp. and T-Mobile US Inc. after learning of the planned deal from T-Mobile executives.
HOUSING MARKET SLOWS IN AUGUST, REPORTED PRICE DECLINES EXAGGERATES WEAKNESS
Central 1 - Brian Yu (2023-09-19)
The combination of rate hikes, fi nancial stress, and uncertainty are curbing household demand for real estate, but declining sales were not universal among provinces. British Columbia, which is more interest rate sensitive given high household debt and high home values, recorded a 10.7 per cent plunge in sales which was the steepest among provinces and pushed sales to the lowest level since March. Ontario (-6.2 per cent) and Quebec (-4.9 per cent) also reported signifi cant declines.
WHY THE BANK OF CANADA PAUSE WON'T SAVE THE HOUSING MARKET THIS TIME
Yahoo Finance - Pamela Heaven (2023-09-19)
Now new listings are surging back to historic norms, up 5.5 per cent in August from last year, and there’s a record number of homes under construction that will make their way onto the market, he said.
CANADIAN NEW HOME CONSTRUCTION PULLS BACK, EXPECTED TO PULL BACK FURTHER
Better Dwelling (2023-09-19)
Canada has seen the new housing construction starts take a dip on the back of weak demand. The seasonally adjusted annual rate (SAAR) of new home starts fell 1% to 253k units in July. Construction starts for urban housing fell 1%, with urban multi-unit construction falling 1.4%, pulling down the 1.7% increase when it came to single-detached urban starts.
CANADA'S HOUSING CRISIS WILL TAKE YEARS TO SOLVE -FINANCE MINISTER
Yahoo Finance (2023-09-18)
An affordable housing crisis that is hurting the Canadian government's popularity will take years to resolve, even if construction hits an 80-year high, Finance Minister Chrystia Freeland said on Saturday.
'EVERYBODY SHOULD JUST SHUT UP': BANK OF CANADA'S INDEPENDENCE UNDER PRESSURE FROM POLITICAL COMMENTS
FP - Gigi Suhanic (2023-09-18)
The Bank of Canada is supposed to be free from government interference, but elected officials have become more vocal about interest rates, inflation and the effect on their citizens, leaving some experts fretting about the central bank’s independence when it comes to monetary policy.
HOME PRICES LEVELLING OFF AS SALES SLOW, LISTINGS REBOUND: CREA
FP - Denise Paglanawan (2023-09-18)
Average home prices rose slightly in August, up 0.4 per cent, while sales slowed and new listings returned to more normal levels, a sign that demand and supply are continuing to come into better balance, according to monthly data released by the Canadian Real Estate Association.
MEET THE WOMAN VYING TO TAKE THE REINS OF NEW ZEALAND’S ECONOMY
Bloomberg - Ainsley Thomson (2023-09-18)
In practice debates before previous New Zealand elections, Nicola Willis used to play the role of formidable female politicians.
BUSINESSES TO GET EXTRA TIME TO PAY BACK CEBA LOANS, TRUDEAU ANNOUNCES
G&M - Chris Hannay (2023-09-15)
The federal government says it is extending the final repayment deadline for Canada Emergency Business Account loans by one year, though the relief has received a mixed response from small-enterprise groups that say the specifics are insufficient.
NO DECISION ON EIB PRESIDENCY EXPECTED THIS WEEK - GERMAN FINANCE MINISTER
Reuters (2023-09-15)
German Finance Minister Christian Lindner said at the informal EU finance ministers meeting on Friday that a decision is not expected this week on who will become European Investment Bank (EIB) president.
A CENTRAL BANK BONANZA
Reuters (2023-09-15)
Central banks take centre stage with five of those overseeing the 10 most heavily traded currencies - including the U.S. Federal Reserve - holding rate-setting meetings, plus a swathe of emerging market ones as well.
CANADIANS FACE 40 YEARS OF STAGNANT INCOMES – GOVERNMENT’S ECONOMIC STRATEGY IS FAILING
G&M (2023-09-14)
In the five years to 2019, Canada’s real per capita growth was an anemic 0.5 per cent per annum. Since 2019, it has been the fifth-weakest of 38 OECD countries – and per capita GDP growth has even turned negative over the past year.
BANK OF CANADA IS BLEEDING THE ECONOMY, JUST LIKE 19TH-CENTURY DOCTORS BLED PATIENTS
G&M (2023-09-14)
In the 19th century, before scientists understood the causes of most acute and chronic diseases, doctors routinely treated illness by bleeding their patients. Using an array of gruesome techniques (from deliberate wounds to the application of leeches), clinicians thought they could restore a patient’s health by eliminating impure blood.
US BANKS SAY REGULATORS BROKE LAW AS FIGHT OVER PROPOSED CAPITAL RULES ESCALATES
Reuters - Pete Schroeder (2023-09-13)
U.S. bank groups on Tuesday accused the Federal Reserve and other regulators of violating federal laws with a sweeping proposal to raise capital requirements, escalating an assault on the draft rules that were also blasted by bank executives.
US LOOKS TO OFFLOAD $13 BLN OF MORTGAGE BONDS SEIZED FROM SVB, SIGNATURE - BLOOMBERG NEWS
Reuters (2023-09-13)
The bonds were part of the $114 billion of assets that the Federal Deposit Insurance Corp (FDIC) picked up when it took over SVB and Signature earlier this year, according to the report, which added the bonds were backed by long-term, low-rate loans made primarily to developers building affordable apartments.
The FDIC has also discussed alternatives to cutting the prices on the bonds, including potentially repackaging the debt into new securities, the report said.THE GREENBELT SCANDAL ISN’T ABOUT HOUSING. IT ISN’T EVEN ABOUT THE GREENBELT
G&M (2023-09-12)
Since 1995, Transparency International, an organization that describes itself as “the global coalition against corruption,” has been compiling its annual data.
THERE'S NOW A BANK OF CANADA NUMBER FOR CARBON TAX'S IMPACT ON INFLATION. IT'S SMALL
CBC (2023-09-12)
Pierre Poilievre's Conservatives have made much sport of arguing the Trudeau Liberals' tool to fight climate change has severely affected the affordability of fuel, groceries and other goods. While the Opposition party has never put a number on it, the figure has never appeared to be as rhetorically small as Macklem put it.
BOE’S NEW DEPUTY GOVERNOR SAYS UK FACES TWO-YEAR STAGNATION
Bloomberg - Tom Rees, Lucy White (2023-09-12)
Sarah Breeden, the nominee to be Bank of England deputy governor for financial stability, warned that over-zealous monetary tightening could cause an unnecessary recession.
BANK OF CANADA'S TIFF MACKLEM EXPLAINS WHY WE'RE NOT IN A RECESSION, WHILE HOLDING LINE ON INTEREST RATES
FP - Chris Varcoe (2023-09-11)
BANK OF CANADA IS NOT TRANSPARENT OR ACCOUNTABLE ENOUGH ON MONETARY POLICY
G&M (2023-09-08)
Canadians and the financial markets are often nervous on the day the Governor of the Bank of Canada announces the key interest rate. Not surprising, given the financial consequences for people’s wallets and the impact of this decision on the economy.
"BANK OF CANADA’S TIFF MACKLEM SAYS INFLATION TARGET ‘NOW IN SIGHT,’ BUT DOESN’T RULE OUT MORE RATE HIKES
G&M (2023-09-08)
"Bank of Canada Governor Tiff Macklem said the central bank’s 2-per-cent inflation target “is now in sight” and that interest rates “may be sufficiently restrictive,” but warned that his team could raise rates again if consumer price growth remains stubborn.
"BANK OF CANADA HOLDS ITS KEY INTEREST RATE STEADY AT 5%. HERE’S WHAT HAPPENS NEXT
G&M (2023-09-07)
"In a statement, published shortly after the rate announcement, Ms. Freeland said the decision was a “welcome relief for Canadians.”
RBC CEO SAYS INTEREST RATES TO COME DOWN NEXT YEAR, ALLOWING FOR SOFT LANDING
FP - Christine Dobby (2023-09-07)
FED’S CHRISTOPHER WALLER SAYS RECENT DATA GIVE U.S. CENTRAL BANK SPACE TO DECIDE NEXT RATE MOVE
G&M (2023-09-06)
Federal Reserve Governor Christopher Waller said on Tuesday the latest round of economic data was giving the U.S. central bank space to see if it needs to raise interest rates again, while noting that he currently sees nothing that would force a move toward boosting the cost of short-term borrowing again.
FORMER TOP BANKER SAYS PREMIERS ARE 'GRANDSTANDING' ON INTEREST RATE HIKES
CBC - Tanya Fletcher (2023-09-06)
Furey's office released a letter to Bank of Canada governor Tiff Macklem in which the premier called on the bank to "more fully consider the negative impacts" interest rate hikes are having on Canadians and to forgo another rate hike "at this time." The bank is expected to announce its next rate decision on Wednesday.
BANK OF CANADA TO ANNOUNCE INTEREST RATE DECISION THIS MORNING
Yahoo Finance (2023-09-06)
Canada's inflation rate ticked up to 3.3 per cent in July year-over-year, but economists say cracks emerging in the economy will likely sway the central bank against further rate hikes.
BANK OF CANADA POISED TO HOLD RATES AT 5% BUT THREATEN MORE HIKES
Bloomberg - Eerik Hertzberg (2023-09-06)
The Bank of Canada is likely to hold interest rates steady on Wednesday as policymakers consider whether a slowing economy means it’s time to end its historic campaign to tighten policy.
BANK OF CANADA EXPECTED TO HOLD RATES STEADY AS ECONOMY STALLS
G&M (2023-09-05)
The Bank of Canada is expected to pause its monetary policy tightening campaign this week, weighing stubborn inflation data against growing evidence that the Canadian economy has begun to stall.
FALLING JOB VACANCIES COULD EASE PRESSURE ON BANK OF CANADA
FP - Randy Thanthong-Knight and Erik Hertzberg (2023-09-01)
CANADIAN ECONOMISTS PREDICT STEADY INTEREST RATES, FALLING HOME PRICES IN 2023
G&M (2023-08-31)
The Bank of Canada is expected to hold its key interest rate steady at 5.00 per cent on Sept. 6 and stay at that level through at least the end of March, 2024, according to a majority of economists in a Reuters poll, with a small but growing minority expecting one more rate rise.
BOE CHIEF ECONOMIST SAYS RATES MUST STAY ‘SUFFICIENTLY HIGH’ FOR SOME TIME
Yahoo Finance - Lucy White and Tom Rees (2023-08-31)
Huw Pill, speaking at the South African Central Reserve Bank biennial conference in Cape Town, said there were multiple paths that monetary policy could take in order to get inflation back to the 2% target.
WILL TRUDEAU’S GOVERNMENT BREACH THE DAVID DODGE RULE?
FP - Theo Argitis (2023-08-31)
The sharp escalation of global bond yields in recent weeks raises the prospect we may be in the middle of a structural shift to a world of permanently higher borrowing costs.
GROUP PULLS OUT OF OTTAWA’S PLAN TO SELL TRANS MOUNTAIN PIPELINE STAKES TO INDIGENOUS OWNERS
G&M (2023-08-29)
The federal government’s plan to sell at least part of the Trans Mountain Expansion Project to Indigenous owners has entered a new stage, with Ottawa indicating it’s prepared to provide financial backing to First Nations and Métis communities to help them acquire ownership stakes in the pipeline, and one group that had been pursuing a stake leaving the field.
JEROME POWELL'S JACKSON HOLE SPEECH HIGHLIGHTS CENTRAL BANK'S UPHILL BATTLE TO REIN IN INFLATION
CBC - Don Pittis (2023-08-29)
Anyone looking for firm direction from the world's most powerful central banker in his much-anticipated speech on Friday in Jackson Hole, Wyo., will inevitably be disappointed.
AT JACKSON HOLE, POST-INFLATION CHALLENGES VEX CENTRAL BANKERS
Yahoo Finance - Matthew Boesler, Catarina Saraiva and Alexander Weber (2023-08-28)
Powell, in his speech, remained vague about whether the Fed would lift its benchmark rate again, though he warned that “additional evidence of persistently above-trend growth could put further progress on inflation at risk and could warrant further tightening of monetary policy.”
NO REAL FIX TO THE SHARP RISE IN PUBLIC DEBT LOADS, ECONOMISTS SAY
Reuters - Ann Saphir (2023-08-28)
The steep jump in public debt loads over the past decade and a half, as governments borrowed large amounts of money to battle the Global Financial Crisis and the fallout from the COVID-19 pandemic, is probably irreversible.
AT JACKSON HOLE, POST-INFLATION CHALLENGES VEX CENTRAL BANKERS
Bloomberg - Matthew Boesler, Catarina Saraiva, and Alexander Weber (2023-08-28)
The world’s top central bankers stressed the need to keep interest rates high until inflation is contained — and wrestled with deeper economic shifts that will make their jobs harder.
PUTIN AND OTHER LEADERS LOCKED IN DISCUSSIONS OVER EXPANSION OF BRICS ECONOMIC BLOC
G&M (2023-08-24)
The leaders of Brazil, Russia, India, China and South Africa held closed-door discussions Wednesday on the possible expansion of their BRICS economic bloc, a move they’ve framed as a way to amplify the voice of developing nations, but which also serves the geopolitical interests of Beijing and Moscow.
MASTERCARD LAUNCHES CBDC PARTNER PROGRAMME
Finextra (2023-08-23)
In 2020, Mastercard built a virtual testing platform to help central banks assess and explore national digital currencies. Since then the firm has worked with several central banks on pilots.
ONTARIO TO PROVIDE $1.2-BILLION IN INCENTIVES, EXPAND STRONG MAYOR POWERS TO ACHIEVE HOUSING TARGETS
G&M (2023-08-22)
Ontario is offering $1.2-billion over three years to municipalities as an incentive to achieve annual housing targets, while also offering to extend the strong mayor powers to more local governments.
TRUDEAU CABINET TO MEET AS MORE CANADIANS BLAME GOVERNMENT FOR INFLATION
Yahoo Finance - Laura Dhillon Kane (2023-08-22)
While headline inflation was 3.3% in July, food prices were up 7.8% and the central bank’s aggressive hikes mean mortgage interest costs have spiked 30.6%. Record levels of immigration have exacerbated a housing supply shortage, helping boost the benchmark home price to C$754,800 (about $558,000).
,BANK OF CANADA STUCK WONDERING WHY INTEREST RATE HIKES HAVE NOT BEEN ENOUGH TO TAME INFLATION
G&M (2023-08-17)
In the ways that matter most, the July inflation figures did,That’s th,
CHINA TOLD STATE BANKS TO ESCALATE YUAN INTERVENTION THIS WEEK
Yahoo Finance (2023-08-17)
Senior officials are also considering the use of tools such as cutting banks’ foreign-exchange reserve requirements to prevent a rapid depreciation in the currency, said the people. The request came as the yuan fell toward 7.35 per dollar, a level that top leadership has been paying close attention to, they added.
MORE RATE HIKES MAY BE NEEDED TO BRING DOWN STILL HIGH INFLATION: FED MINUTES
FP - Christopher Rugaber (2023-08-17)
According to the minutes, the Fed’s policymakers also felt that despite signs of progress on inflation, it remained well above their two per cent target. They “would need to see more data … to be confident that inflation pressures were abating” and on track to return to their target.
CHINA'S STATE BANKS SEEN SELLING DOLLARS FOR YUAN IN LONDON AND NEW YORK HOURS
Reuters (2023-08-17)
China's major state-owned banks were seen busy selling U.S. dollars to buy yuan in both onshore and offshore spot foreign exchange markets this week, people with direct knowledge of the matter said, in an attempt to slow the yuan's depreciation.
FED CHAIR POWELL TO GIVE ECONOMIC OUTLOOK SPEECH AT JACKSON HOLE
G&M (2023-08-17)
Chair Jerome Powell will deliver a talk on the economic outlook on Aug. 25 at the central bankers’ confab held each year in Jackson Hole, Wyoming by the Kansas City Fed, the U.S. central bank said on Thursday.,The speech, set for 10:05 a.m. ET, will provide a chance to give his latest views on whether more policy tightening will be needed to bring down inflation amid surprisingly strong economic growth, or if enough progress on disinflation has been made to hold rates steady.
WITH INFLATION SOARING AT 113%, ARGENTINA SHOULD MOTHBALL ITS CENTRAL BANK AND DOLLARIZE, TOP ECONOMIST STEVE HANKE SAYS
Yahoo Finance - Zahra Tayeb (2023-08-17)
"In Argentina, official inflation has hit 113%/yr. STILL TOO LOW. I accurately measure inflation at a whopping 139%/yr ~1.2x the official rate. The solution: mothball the central bank and DOLLARIZE!" Hanke said in a Wednesday post on X.
FED MEETING MINUTES COULD HINT AT END OF RATE HIKES
Yahoo Finance - Howard Schneider (2023-08-16)
The minutes of the Federal Reserve's policy meeting last month may indicate on Wednesday how many policymakers feel the U.S. central bank is done raising interest rates and whether possible risks to the economy from the aggressive monetary tightening have taken on more weight in their debate.
ARGENTINE PESO TO SLIDE 70% BY NEXT YEAR, BOFA SAYS
Yahoo Finance - Kerim Karakaya (2023-08-16)
The official exchange rate will weaken to 545 per dollar for the end of this year and then slump to 1,193 by the end of 2024, as the bank’s strategists expect the winner of the country’s presidential elections to further devalue the peso starting in December.
RTGS AND CHAPS BACK ONLINE AFTER SIX-HOUR OUTAGE
Finextra (2023-08-15)
In March 2019, the central bank was hauled over the coals by a Common Select Committee in a searing critique of its outmoded technology estate, culture and procurement activities.
RUSSIAN RUBLE VALUE PLUNGES TO LOWEST LEVEL SINCE EARLY DAYS OF UKRAINE INVASION
CBC (2023-08-15)
Analysts say the weakening of the ruble is being driven by increased defense spending — leading imports to rise — and falling exports, particularly in the oil and natural gas sector. Importing more and exporting less means a smaller trade surplus, which typically weighs on a country's currency.
UK WATCHDOG KICKS OFF 'POLITICALLY-EXPOSED PERSONS' REVIEW
Reuters - Huw Jones (2023-08-15)
Britain's Financial Conduct Authority said on Monday it will ask lawmakers to report any problems they have opening or maintaining a bank account ahead of a formal investigation.
BANK OF CANADA PAPER CASTS DOUBT ON CBDC VALUE
Finextra (2023-08-14)
Canada's central bank has spent the last few years carrying out research into a digital loonie and what design features would be relevant to citizens with diverse payment needs and circumstances.
DOUG FORD IS TRYING TO GASLIGHT VOTERS ABOUT WHAT HE DID IN THE GREENBELT
G&M - Tony Keller (2023-08-11)
Toronto, on Wednesday, Aug. 9, at 11 a.m.,that’s when Ontario Auditor-General Bonnie Lysyk released her report on the greenbelt, surrounding Toronto. She found that the process for opening 7,400 acres of protected land to developers last year “was not transparent, fair, objective, or fully informed,” involved “certain prominent developers receiving preferential treatment” and “cannot be described as a standard or defensible process.”
RUSSIA'S ECONOMY TAKES A HIT AS ITS CURRENT-ACCOUNT SURPLUS CRASHES 85% COMPARED TO LAST YEAR
Yahoo Finance - Phil Rosen (2023-08-11)
Those energy revenues, however, have since tumbled, down 41% year-over-year for the first seven months of 2023. The latest data show Russia's current account is now at $25.2 billion, which reflects the heavy toll that war and Western sanctions have had on the economy.
BANK OF ENGLAND RECRUITS ACADEMICS TO ADVISE ON DIGITAL POUND DESIGN
Finextra (2023-08-11)
In a statement, the Bank says: "In February 2023, the Bank of England and HM Treasury jointly issued a Consultation Paper setting out an assessment of the motivations and design choices for a potential digital pound. While no decision has been made, that paper signalled that the digital pound is likely to be needed in the future, so our work will now move onto a 'design phase'.
JUSTIN TRUDEAU AND THE LEFT’S NEW HYPOCRISY TOWARD THE BANK OF CANADA IS DANGEROUS
G&M - Karamveer Lalh (2023-08-08)
About a year ago, in the context of the federal Conservative leadership race, Mr. Trudeau was quick to imply that then-candidate Pierre Poilievre’s commitment to fire Governor Tiff Macklem of the Bank of Canada for failing to keep inflation in check was irresponsible and undermined the institution’s independence.
WHY THE BANK OF CANADA’S POLICY POSITION COULD HAVE CATASTROPHIC CONSEQUENCES
G&M - James Thorne (2023-08-04)
The Bank of Canada (BoC) is teetering on the edge of a potentially disastrous policy mistake. The inflation shock is now over. Inflation rates have declined dramatically during the past year, and there’s no solid evidence to suggest Canada’s economy is overheating. The central bank is now at a point at which it must adopt a monetary policy that’s independent of the U.S. Federal Reserve Board.
DEBT-BURDENED WORLD LEADERS JUST LOVE TO HATE RATINGS COMPANIES
Yahoo Finance - Matthew Boesler, Craig Stirling (2023-08-04)
Rich-world peers from Italy to France and the UK are in the spotlight as higher interest rates impact debt levels exceeding 100% of annual output. Stakes are even higher for capital-hungry developing nations, where potentially ill-timed, negative revisions can push up borrowing costs for years.
JUSTIN TRUDEAU AND SOPHIE GRéGOIRE TRUDEAU ANNOUNCE SEPARATION
CBC - Aaron Wherry (2023-08-03)
According to a statement from the Prime Minister's Office, Trudeau and Grégoire Trudeau have "signed a legal separation agreement."
WALL ST FUTURES TUMBLE AFTER FITCH DOWNGRADES TOP-TIER US RATING
Yahoo Finance (2023-08-02)
Fitch downgraded the United States to AA+ from AAA, citing fiscal deterioration over the next three years as well as a growing general government debt burden, making it the second major rating agency after Standard & Poor's move in 2011 to strip the country of its triple-A rating.
EGYPT CURRENCY SQUEEZE SINKS BANK FOREIGN BUFFERS TO NEW LOW
Yahoo Finance - Mirette Magdy (2023-08-02)
The gap among lenders reached $17.1 billion, compared with $14.5 billion in May, according to data released by the central bank. The shortfall opened up as a result of a $1.7 billion drop in banks’ assets and an around $950 million increase in their liabilities.
OTTAWA REWARDS FAILURE WITH TAXPAYER-FUNDED BONUSES
FP - Franco Terrazzano (2023-08-01)
Bonuses are for people who excel at their job, not for people who fail at their job. Finance Minister Chrystia Freeland, who is ultimately the federal government’s paymaster, needs to be reminded of that.
ONE BIG GOLD SELLER AMONG CENTRAL BANKS HAS EVEN MORE TO OFFLOAD
Yahoo Finance - Nariman Gizitdnov (2023-07-31)
Alongside its counterparts in Turkey and Uzbekistan, the National Bank of Kazakhstan has emerged among the institutions that have contributed to a second straight quarter of decline in bullion purchases from central banks, whose buying accounted for nearly a quarter of global gold demand last year.
INFLATION, HOUSEHOLDS AREN’T CUTTING BACK THE WAY CENTRAL BANKERS WANTED
G&M - Mark Rendell (2023-07-30)
The resilience of the Canadian consumer has surprised economists and confounded central bankers. Fuelled by pent-up demand for in-person services as the COVID-19 pandemic has faded, and bolstered by high immigration and a strong labour market, consumer spending has remained remarkably sturdy through the first half of this year, despite rising prices and the most aggressive interest-rate hiking cycle in decades.
TD REPORT PREDICTS HIGHER INTEREST RATES AND AN AFFORDABILITY CRISIS
G&M - Jason Kirby (2023-07-28)
If Canada’s population boom continues at its current frantic pace, interest rates will face upward pressure and the massive influx of people will significantly worsen affordability for homebuyers and renters, a new report from TD Bank warns.
GLOBAL BONDS SLIP AS JAPAN LOOSENS GRIP ON YIELDS: MARKETS WRAP
Bloomberg - SUJATA RAO (2023-07-28)
Bonds around the world fell as the Bank of Japan, the only major central bank not to have begun reversing ultra-easy monetary policy, surprised investors by loosening its control of market rates.
ECB HIKES INTEREST RATES AND LEAVES DOOR OPEN TO MORE
Investment Executive - David McHugh (2023-07-28)
U.S. Federal Reserve Chair Jerome Powell was similarly noncommittal about whether more rate increases might be coming after the Fed on Wednesday raised its key rate for the 11th time in 17 months.
TRUDEAU UNVEILS SIGNIFICANT CABINET SHUFFLE WITH SEVERAL NEW MINISTERS BROUGHT ON BOARD
G&M - Laura Stone, Kristy Kirkup (2023-07-27)
Mr. Trudeau, in explaining the massive shakeup, promised to place a greater emphasis on the economy and housing, for the “millions of Canadians who are struggling.”
U.S. CENTRAL BANK RAISES INTEREST RATES AGAIN, TO HIGHEST LEVEL SINCE 2001
CBC (2023-07-27)
The U.S. Federal Reserve raised its key interest rate for the 11th time in 17 months on Wednesday, leaving the door open to another increase as the central bank shows how serious it is about getting inflation back to two per cent.
BOC MINDFUL OF NOT OVERDOING RATE HIKES, SUMMARY OF DELIBERATIONS REVEALS
Yahoo Finance (2023-07-27)
"If policy is not restrictive enough to bring inflation to target on a reasonable timetable, there is a risk that rates will have to be increased by even more later. If policy is simply taking longer to work ... over-tightening risks making economic conditions more painful than necessary," the summary says.
BIG INTEREST RATE CUTS AHEAD FROM THE BANK OF CANADA IF 2001 IS ANY INDICATION
FP - Ted Rechtshaffen (2023-07-27)
The central bank now forecasts the consumer price inflation (CPI) index will return to two per cent in mid-2025. If this two-year prediction causes you concern that policymakers won’t be lowering rates for two years, fear not. It is quite amazing that they feel confident in making a prediction for two years out. Keep in mind that only 18 months ago, the overnight rate was still 0.25 per cent.
As 2000 turned to 2001, the Bank of Canada’s rate was at six per cent. It is 5.25 per cent today. Back then, real gross domestic product (GDP) was growing by 4.7 per cent and employment was rising by 2.6 per cent. Higher energy prices were boosting exports. There was growth in employment and wages and, together with tax cuts, this grew consumer spending.
OSFI CONSULTS ON CRYPTO RULES FOR BANKS, INSURERS
Investment Executive - James Langton (2023-07-27)
The regulator said the new guidance, which will take effect in the fiscal first quarter of 2025, is designed to “reflect an evolving risk environment and international developments.”
BANK OF CANADA PUBLISHES ITS 2024 SCHEDULE FOR POLICY INTEREST RATE ANNOUNCEMENTS AND OTHER MAJOR PUBLICATIONS
BOC (2023-07-27)
Rates
- Wednesday, September 6
- Wednesday, October 25*
- Wednesday, December 6
- Wednesday, January 24*
- Wednesday, March 6
- Wednesday, April 10*
- Wednesday, June 5
- Wednesday, July 24*
- Wednesday, September 4
- Wednesday, October 23*
- Wednesday, December 11
- Monday, January 15
- Monday, April 1
- Monday, July 15
- Friday, October 11
NATWEST BANK CEO OUSTED AFTER FUROR OVER POLITICIAN NIGEL FARAGE'S BANK ACCOUNT
Yahoo Finance (2023-07-26)
Farage, a skilled seeker of attention and generator of outrage, accused the bank of stomping on his freedom of speech, and some members of the Conservative government echoed his concerns.
BANK OF CANADA SEEN HOLDING RATES AT 5% AS ECONOMY AVOIDS HARD LANDING
FP - Randy Thanthong-Knight and Sarina Yoo (2023-07-26)
POWELL HAS STOPPED HANDING GIFTS TO WALL STREET ON FED DAY
Bloomberg - Ye Xie, and Matthew Boesler (2023-07-26)
In what was a brutal 2022 for investors, there was at least one sure-fire, money-making proposition for much of the year. All they had to do was buy stocks and bonds seconds before Federal Reserve Chair Jerome Powell began speaking at his post-FOMC press conference and dump them as he was wrapping up.
MARKET PARTICIPANTS SURVEY—SECOND QUARTER OF 2023
BOC (2023-07-26)
The Market Participants Survey results are based on questionnaire responses from about 30 financial market participants. You can view the latest quarterly data here.
KEY QUESTION AS FEDERAL RESERVE MEETS: CAN THE U.S. CENTRAL BANK PULL OFF A DIFFICULT ‘SOFT LANDING’?
G&M - Christopher Rugaber (2023-07-25)
When Chair Jerome Powell and other Federal Reserve officials gather this week for their latest decision on interest rates, they will do so on the cusp of achieving an elusive “soft landing” – the feat of curbing inflation without causing a deep recession.
WE'RE SICK AND TIRED OF WOKE COMPANIES TELLING US WE'RE EVIL
Talk TV (2023-07-25)
This week Coutts bank, my own bank, was exposed for terminating Nigel Farage’s account because of his divisive opinions and his stance on Brexit.
WHY THE WORLD NEEDS MORE FEMALE CENTRAL BANKERS
Bloomberg - Andreea Papuc (2023-07-24)
European Central Bank President Christine Lagarde, perhaps the world’s most well-known female central banker since Janet Yellen led the Federal Reserve, spoke candidly earlier this year about being surrounded by men her entire career. Diversity would produce better results, she said.
RUSSIAN CENTRAL BANK HIKES RATES 100 BASIS POINTS AS UKRAINE WAR SPARKS RUBLE CRASH AND LABOR CRISIS
Yahoo Finance - Filip De Mott (2023-07-21)
It marked the first increase since the immediate aftermath of Russia's invasion early last year. Rates are now going up 100 basis points to 8.5% from 7.5%, as policymakers cited inflationary pressure from the ruble's recent slide and worker shortages.
CHINA'S STATE BANKS SEEN SELLING DOLLARS OFFSHORE TO SLOW YUAN DECLINES
Reuters (2023-07-20)
China's major state-owned banks were seen selling dollars to buy yuan in the offshore spot market in early Asian trades on Thursday, two people with direct knowledge of the matter said.
OSFI DEFERS LIQUIDITY GUIDANCE FOR HIGH-INTEREST SAVINGS ETFS
Investment Executive (2023-07-20)
Instead of expecting banks to adhere to current liquidity guidance on Aug. 1, OSFI said it expects to issue further guidance in October, and banks will be expected to align with any changes by January 2024.
NATWEST APOLOGISES TO NIGEL FARAGE OVER ACCOUNT CLOSURES, REPORTERS SAY
Reuters (2023-07-20)
British bank NatWest has apologised to former Brexit party leader Nigel Farage for the handling of the closure of his accounts with its private banking arm Coutts, according to two reporters citing copies of the letter on Twitter.
CANADA’S INFLATION RATE FALLS TO 2.8 PER CENT BUT LONG ROAD AHEAD TO PRICE STABILITY
G&M - Matt Lundy (2023-07-19)
The Consumer Price Index rose 2.8 per cent in June from a year earlier, down from May’s 3.4-per-cent pace, Statistics Canada said Tuesday in a report. This was the lowest inflation rate since March, 2021, and it was below the 3-per-cent reading analysts had expected.
ECB TO PUSH BANKS FOR WEEKLY LIQUIDITY DATA AS SCRUTINY GROWS
Yahoo Finance - Nicholas Comfort and Steven Arons (2023-07-19)
The ECB proposes to ask lenders to report data on their liquidity reserves on a weekly basis, breaking out funding by maturity and type of client, people familiar with the matter said, asking not to be identified as the deliberations are private.
IF THE PROVINCES WANT TRADE COMPETITIVENESS, THEY SHOULD START WITH THEIR INTERPROVINCIAL BACKYARDS
G&M - DAVID PARKINSON (2023-07-17)
At the conclusion of last week’s summit of premiers in Winnipeg, the leaders of our nation’s provinces talked a good game about the need for co-operation “to achieve Canada’s full economic potential.”
PETER ROUTLEDGE, SUPERINTENDENT OF FINANCIAL INSTITUTIONS SHARES HOW OSFI IS WORKING TO ENCOURAGE GOOD GOVERNANCE, STARLING TRUST PAPER
OSFI (2023-07-17)
Following the global financial crisis of 2007-2008, OSFI saw a clear need for improvement in board effectiveness. A focus on the roles and responsibilities of boards of directors was an important first step towards strong corporate governance. To address the problem, OSFI revised its Corporate Governance Guideline in January 2013 (originally published in 2003). With this revision, OSFI elevated its expectations for corporate governance effectiveness to promote enhanced focus on sound prudential oversight by Boards of Directors in the Canadian federal financial system.
BANK OF CANADA WARY OF SIGNS OF A TURNING POINT IN ECONOMY, AS IT HIKES KEY INTEREST RATE AGAIN
CBC - Don Pittis (2023-07-14)
"We deal in a lot of aggregate numbers and averages, but we know that inflation and interest rates affect people very differently," Rogers said. "In particular, we know ... that the most vulnerable Canadians are the ones that are hurt most both by inflation and by higher interest rates."
BANK OF CANADA DEPLOYING FORECAST ‘FICTION,’ SCOTIABANK ECONOMIST SAYS
Bloomberg (2023-07-14)
The Bank of Canada is using its economic forecasts to try to prevent medium-term rates from falling too much and stoking more housing market speculation, according to a top economist.
BANK OF CANADA RAISES ITS KEY INTEREST RATE TO 5%, THE HIGHEST LEVEL IN 22 YEARS. HERE’S WHAT’S NEXT
G&M - MARK RENDELL AND DAVID PARKINSON (2023-07-13)
Here is how economists on Bay Street reacted to the latest Bank of Canada rate hike:
WORLD BANK NAMES CEOS TO HELP BRING PRIVATE FUNDS TO CLIMATE, DEVELOPMENT FINANCE
Reuters - David Lawder (2023-07-11)
The World Bank on Monday named 15 chief executive officers including financiers and asset managers to a group launched by the lender's president, Ajay Banga, aiming to marshal more private capital to combat climate change and boost investment in developing countries.
NIGEL FARAGE AND THE GREAT ANTI-BREXIT UNBANKING PLOT
Politico - IZABELLA KAMINSKA AND DAN BLOOM (2023-07-11)
The rules recommend that any “individual who is entrusted with prominent public functions, other than as a middle-ranking or more junior official” be exposed to enhanced due diligence standards. That ensnares a wide catchment of political appointees, MPs and members of the House of Lords — along with their “family members” and “known close associates."
TWENTY-FOUR CENTRAL BANKS WILL HAVE DIGITAL CURRENCIES BY 2030 - BIS SURVEY
Yahoo Finance - Karin Strohecker (2023-07-10)
Most of the new Central Bank Digital Currencies (CBDCs) will emerge in the retail space, where eleven central banks could join peers in the Bahamas, the Eastern Caribbean, Jamaica and Nigeria which already run live digital retail currencies, the BIS found in its survey of 86 central banks conducted late 2022.
AUSTRALIAN CENTRAL BANK LEAVES ITS BENCHMARK CASH RATE AT 4.1% BUT WARNS THERE MAY BE FURTHER HIKES
Yahoo Finance (2023-07-04)
“Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable time-frame, but that will depend upon how the economy and inflation evolve,” Lowe said in a statement.
WHY ARE INTEREST RATE RISES NOT TAMING INFLATION?
FT - Chris Giles, Valentina Romei and Alan Smith (2023-07-04)
Central banks have been raising interest rates at the fastest pace since the 1990s, but the most severe bout of inflation in a generation is yet to be tamed.
CHINA’S PBOC STICKS WITH YUAN SUPPORT AS CURRENCY LOSSES DEEPEN
Bloomberg (2023-06-30)
The central bank set its so-called fixing for the managed currency at a stronger-than-expected level on Friday, after the offshore yuan extended a seven-month low. The move came after reports that regulators have stepped up scrutiny of currency trading and cross-border capital flows, in a bid to stabilize the yuan.
BNP FACES QUESTIONS IN WASHINGTON OVER CHINA DIGITAL YUAN WORK
Yahoo Finance - Ambereen Choudhury, Alexandre Rajbhandari and Daniel Flatley (2023-06-30)
Attention on the state-backed digital currency rose in Washington when Beijing piloted the tender at the 2022 Winter Olympics. Yet concerns that the currency could eventually supplant or bypass the US financial system, not China’s domestic use, are rankling some American officials. Republican lawmakers have been the most vocal.
FED'S POWELL: MOST US POLICYMAKERS SEE TWO OR MORE RATE HIKES AHEAD
Yahoo Finance (2023-06-29)
"We made this decision in light of the distance we have come in tightening policy, the uncertain lags in monetary policy, and the potential headwinds from credit tightening," Powell said.
INFLATION SLOWS TO 3.4%, BUT BANK OF CANADA POISED TO HIKE RATES AGAIN
G&M - Matt Lundy (2023-06-28)
The May inflation numbers benefited from favourable comparisons with a year ago, otherwise known as base-year effects. Commodity prices surged after Russia’s invasion of Ukraine in early 2022, but those initial effects are no longer part of the year-over-year calculation of consumer price inflation.
XI VOW TO PROTECT FOREIGN INVESTORS RAMPS UP CHARM OFFENSIVE
Yahoo Finance (2023-06-28)
“We will continue to vigorously promote high-level opening up and better protect the rights and interests of foreign investors per the law,” Xi said, according to the official Xinhua News Agency.
BMO STRATEGIST ON HOUSING: ‘IF THE MOST INTEREST RATE SENSITIVE PART OF THE ECONOMY ISN’T BUCKLING ... THEN POLICY RATES LIKELY AREN’T HIGH ENOUGH’
G&M - Scott Barlow (2023-06-27)
“The beat goes on with another strong run of Canadian data. This time it was retail sales, with April spending climbing 1.1 per cent. Most of that gain was due to higher prices, as volumes were up a modest 0.3 per cent, but it doesn’t change the fact that consumers appear to be more than willing to spend, spend, spend! …
SHOPIFY TO FIGHT CRA REQUEST FOR SIX YEARS OF MERCHANT TAX RECORDS: CEO
Yahoo Finance (2023-06-27)
Asked about what it is trying to ascertain from Shopify's records, the CRA said it uses information obtained through "unnamed persons requirements to identify taxpayers that may have been non-compliant and verifies that they have appropriately reported their income and have satisfied their filing obligations."
PUTIN FACES HISTORIC THREAT TO ABSOLUTE GRIP ON POWER IN RUSSIA
Bloomberg (2023-06-26)
Vladimir Putin managed to avert an attack on Moscow with an eleventh-hour deal with his mutinous mercenary commander. But the uprising has pierced his aura of total political control over Russia unlike any other event in his nearly quarter century in power.
RUSSIAN DEFENCE MINISTER MAKES 1ST PUBLIC APPEARANCE SINCE ABORTED MERCENARY REVOLT
CBC (2023-06-26)
The rebellion ended on Saturday when Prigozhin ordered his troops back. The Kremlin said it had made a deal that the mercenary chief will move to Belarus and receive an amnesty, along with his soldiers. The mutiny marked the biggest challenge to President Vladimir Putin in more than 20 years of rule.
A HUGE HUMILIATION’: FAILED PUTSCH EXPOSES DEEP FLAWS IN PUTIN’S REGIME
FT - Max Seddon (2023-06-26)
Vladimir Putin vowed to punish Yevgeny Prigozhin for “treason” over the warlord’s armed uprising. Instead, the former Kremlin caterer and his Wagner group appeared to escape any harsh consequences after launching the first coup attempt in Russia for three decades.
STATEMENT FROM THE SUPERINTENDENT ON ROYAL ASSENT OF BILL C-47
OSFI (2023-06-26)
“Canadians must be confident that federally regulated financial institutions (FRFIs) have protections in place to counter threats to their integrity or security, including foreign interference.
THE STATUS OF WAGNER'S PRIGOZHIN REMAINS UNCERTAIN AS RUSSIA AIMS TO REGULATE MERCENARY GROUP. HERE'S THE LATEST
CNN (2023-06-25)
These were 36 hours that provided a glimpse of the end of Russian President Vladimir Putin’s rule. Almost every action was improbable, at best a week ago – much was inconceivable, 17 months ago.
INSTABILITY RATCHETS UP PRESSURE ON VLADIMIR PUTIN
BBC - Steve Rosenberg (2023-06-25)
"You can't make a public statement declaring people are criminals and then, on the same day, at the end of the day, let your press secretary disagree with you and say 'No, those people haven't broken the criminal code.'"
UKRAINE WAR UPDATES: CRISIS SHOWS ‘REAL CRACKS’ IN RUSSIA
Aljazeera - Mersiha Gadzo, Kate Mayberry and Umut Uras (2023-06-25)
“We agree that the Russian authorities are weak and that withdrawing Russian troops from Ukraine is the best choice for the Kremlin,” Reznikov wrote on Twitter.
WHY DID PUTIN LET PRIGOZHIN WALK AWAY?
Daily Beast - Allison Quinn (2023-06-25)
The Kremlin even publicly guaranteed that Wagner Group founder Yevgeny Prigozhin had President Vladimir Putin’s “word” he could safely leave the country—after conveniently having criminal charges against him dropped.
BANK OF CANADA NOW EXPECTED TO CAP RATE-HIKING CAMPAIGN AT 5%
Yahoo Finance - Erik Hertzberg and Sarina Yoo (2023-06-25)
Canada’s central bank will increase its key overnight rate to 5% in the third quarter, according to a monthly Bloomberg survey of 25 economists. That would be the highest level since 2001.
FEDERAL RESERVE’S JEROME POWELL SAYS HIGHER INTEREST RATES NEEDED TO CURB INFLATION
FP (2023-06-23)
“My colleagues and I understand the hardship that high inflation is causing, and we remain strongly committed to bringing inflation back down to our two per cent goal,” Powell said Wednesday in prepared remarks to be delivered to the House Financial Services Committee. “We will continue to make our decisions meeting by meeting, based on the totality of incoming data and their implications for the outlook for economic activity and inflation, as well as the balance of risks.”
CENTRAL BANKS’ BATTLE WITH INFLATION ENTERS A NEW PHASE OF ‘PAIN’
FT - Chris Giles, Colby Smith (2023-06-23)
Headline rates of inflation across most of the world’s economies have fallen back sharply since the autumn but core rates — which exclude volatile categories such as energy and food — remain at or close to multi-decade highs.
POWELL DEFIES DC CRITICS AND MAKES CASE FOR WHY RATES MUST RISE
Yahoo Finance - Rich Miller (2023-06-22)
That led to speculation that the break in the tightening campaign was an uneasy compromise between monetary doves who fear the Fed may raise rates too far and trigger a recession, and hawks who worry it won’t tighten credit enough to curb inflation that is running more than twice the central bank’s target.
UK NET DEBT PASSES 100% OF GDP FOR FIRST TIME SINCE 1961
Reuters (2023-06-21)
Britain's public sector net debt surpassed 100% of gross domestic product in May as borrowing came in higher than expected, the Office for National Statistics said on Wednesday.
UK'S HUNT SAYS MORTGAGE HOLDERS SHOULD NOT EXPECT FINANCIAL HELP
Reuters - David Milliken and Suban Abdulla (2023-06-21)
British finance minister Jeremy Hunt will hold a meeting with Britain's major banks on Friday to discuss how they can help homeowners hit by rising mortgage costs, after saying the government would not offer borrowers significant financial help.
RELEASE OF THE BANK OF CANADA’S SUMMARY OF DELIBERATIONS
BOC (2023-06-21)
On Wednesday, June 21, 2023, the Bank of Canada will publish a summary of the deliberations that took place ahead of its interest rate decision on June 7, 2023.
UNDERSTANDING INFLATION DYNAMICS: THE ROLE OF GOVERNMENT EXPENDITURES
BOC - Chang Liu, Yinxi Xie (2023-06-21)
This paper studies the impact government expenditure has on inflation by examining an augmented Phillips curve implied from a structural New Keynesian model. Our estimation results, based on external instruments, show that the augmented Phillips curve has a flatter slope than the canonical specification and that government expenditure has a negative coefficient.
NEW ZEALAND TO INVESTIGATE PROFITABILITY, COMPETITION AT BANKS
Reuters (2023-06-20)
The banking sector is dominated by four banks making up around 85% of mortgage and other lending, and 90% of deposits, government data showed. Loans by smaller lenders have been rising but remain small in comparison.
BOE A STEP CLOSER TO LAUNCHING DIGITAL POUND AFTER PROJECT ROSALIND STUDY
Bloomberg - Lucy White and Aisha S Gani (2023-06-20)
The Bank of England is a step closer to launching its own digital currency after a yearlong project concluded the technology could support a “diverse range” of new ways to use money.
HIGH GOVERNMENT SPENDING MEANS MORE INFLATION? IT’S COMPLICATED, ECONOMISTS SAY
Investment Executive - Nojoud Al Mallees (2023-06-20)
As to what drove the current bout of high inflation in Canada and what role government spending had to play, Tombe said that’s still an open question.
BANK OF CANADA LIKELY TO HIKE AGAIN IN JULY: TD
Investment Executive - James Langton (2023-06-19)
“We expect the BoC will hike rates again in July to 5.00% as it enters this trial-and-error stage of fine tuning the policy rate,” it said.
OTTAWA HALTS PARTICIPATION IN CHINA-LED DEVELOPMENT BANK
G&M - Steven Chase, James Griffiths (2023-06-15)
The bank’s global communications director, Bob Pickard, announced his resignation on Twitter Wednesday and recommended that Ottawa quit the bank because it was “dominated” by members of the Chinese Communist Party. He cited his Canadian citizenship when departing the Asian Infrastructure Investment Bank (AIIB).
POWELL INDICATES AT LEAST TWO MORE RATE HIKES AHEAD AFTER PAUSE
Yahoo Finance - Catarina Saraiva and Steve Matthews (2023-06-15)
Policymakers on Wednesday left rates in a range of 5% to 5.25%, taking their first breather in a 15-month hiking campaign that included four jumbo-sized 75-basis-point increases last year.
FED KEEPS RATES UNCHANGED FOR FIRST TIME IN 15 MONTHS
Investment Executive - Christopher Rugaber (2023-06-15)
The Fed’s aggressive streak of rate hikes, which have made mortgages, auto loans, credit cards and business borrowing costlier, have been intended to slow spending and defeat the worst bout of inflation in four decades.
FED POISED TO PUNT RATE HIKE INTO THE SUMMER WIND
Yahoo Finance - Howard Schneider (2023-06-14)
"We probably need a little more tightening, but it is not clear how much," said Blerina Uruci, chief U.S. economist in the fixed income division at T. Rowe Price Associates, noting that despite strength in recent employment and core inflation reports, a "nuanced" reading of the data showed both may be set to weaken.
BANK OF CANADA RATE HIKE SEEN AS 'CANARY IN A COAL MINE' AS FED DECISION LOOMS
FP - Denise Paglanawan (2023-06-14)
Both the Canadian and Australian central banks surprised markets by raising rates last week, leading to a slump in global bonds and speculation that the Fed might follow suit. The Fed, however, has been vocal in signalling that it will hold this week, with markets placing odds of a hold at 75 per cent. That looked even more likely after May inflation checked in Tuesday at four per cent, the lowest level in two years.
SILVIO BERLUSCONI, ITALY LEADER MIRED IN SCANDAL, DIES AT 86
Yahoo Finance (2023-06-13)
Berlusconi was one of the most influential figures in Italian politics of the last three decades. Berlusconi made headlines in February 2023, when an audio recording emerged in which he praised the Russian leader, said he’d rekindled their friendship through gifts and letters, and blamed Ukrainian President Volodymyr Zelenskiy for Russia’s invasion.
FISCAL POLICY NEEDS TO JOIN INFLATION FIGHT: CIBC
Investment Executive - James Langton (2023-06-13)
At the same time, government hiring has outpaced private sector employment, keeping the pressure on labour markets at a time when the prospect of wage inflation remains a key concern for the central bank, it said.
SEC LAWSUITS AGAINST CRYPTOCURRENCY COMPANIES RAISE QUESTIONS ABOUT INDUSTRY’S FUTURE
G&M - FATIMA HUSSEIN & KEN SWEET (2023-06-12)
Industry leaders say that, with their latest actions, U.S. regulators are more clearly signalling that they seek to ensure cryptocurrency has no room in the traditional financial system.
NIGERIA BONDS SURGE ON WEEKEND OUSTER OF CENTRAL BANK CHIEF
Yahoo Finance - Anthony Osae-Brown and Emele Onu (2023-06-12)
Governor Godwin Emefiele was suspended by Tinubu after the markets closed on Friday, and then detained by Nigeria’s state security service a day later for unexplained “investigative reasons.” Folashodun Shonubi, a deputy governor in charge of operations at the bank, took over in an acting capacity.
BANK OF CANADA HIKES ANOTHER 25 BASIS POINTS, BRINGING POLICY RATE TO 4.75%
Yahoo Finance - Alicja Siekierska (2023-06-08)
The increase brings the central bank's target for the overnight rate to 4.75 per cent, the highest level since May 2001, and restarts its tightening campaign as policymakers continues to try to tame inflation.
FREELAND TRIES TO CALM ‘ANXIOUS’ CANADIANS AFTER FRESH RATE HIKE
Bloomberg (2023-06-08)
Finance Minister Chrystia Freeland tried to reassure Canadians that the economy is still headed for calmer times after the central bank unexpectedly resumed raising interest rates.
IS IT A ‘SKIP’ OR A ‘PAUSE’? LANGUAGE MATTERS AS FED PREPARES FOR RATE ANNOUNCEMENT
Investment Executive - Christopher Rugaber (2023-06-08)
The purpose of suspending its rate hikes is to give the Fed’s policymakers time to look around and assess how much higher borrowing rates are slowing inflation. Calling next week’s decision a “skip” is also a way for Chairman Jerome Powell to forge a consensus among an increasingly fractious committee of Fed policymakers.
BANK OF CANADA TO ANNOUNCE INTEREST RATE DECISION THIS MORNING
Yahoo Finance (2023-06-07)
Economists — many of whom expected high interest rates to send the economy into a recession by now — say the recent data suggests the central bank may have to hike interest rates again to get inflation back to the two per cent target.
FIRST REPUBLIC'S FORMER CO-CEO COULD BE TURKEY'S NEXT CENTRAL BANK CHIEF
Yahoo Finance - Jeffrey Cane (2023-06-07)
Before First Republic, Erkan was at Goldman Sachs for nearly nine years, advising financial institutions. She was named a managing director in 2011. A graduate of Bogazici University in Turkey, she earned a Ph.D. in operations research and financial engineering from Princeton in 2006.
THE BANK OF CANADA IS LIKELY READY TO START HIKING INTEREST RATES AGAIN
Bloomberg - Erik Hertzberg (2023-06-07)
The Bank of Canada probably isn’t done raising interest rates.
MORGAN STANLEY SEES ECB ENDING ITS RATE HIKE CYCLE IN JULY AT 3.75%
Reuters (2023-06-05)
U.S. investment bank Morgan Stanley (MS.N) said on Monday that it expected the European Central Bank (ECB) to end its interest-rate hiking cycle in July at 3.75%.
CRISIS AVERTED ON THE DEBT CEILING — FOR NOW: BIG TAKE PODCAST
FP (2023-06-05)
he last-minute deal to raise the debt limit averted a US default, but risks making brinkmanship over federal borrowing a seasonal event as lawmakers wage fiscal war in Washington.
WHAT’S THE RIGHT NUMBER OF IMMIGRANTS FOR CANADA?
G&M - Ian McGugan (2023-06-05)
Prominent business economists say they are baffled by the government’s insistence on sticking to supersized immigration quotas at a time of widespread housing shortages. Stéfane Marion, chief economist at National Bank of Canada, and David Rosenberg, president of Rosenberg Research, have urged Ottawa to consider revising its targets to allow housing supply to catch up to demand.
JPMORGAN CEO JAMIE DIMON HAS NO PLANS TO RUN FOR OFFICE, COMPANY SAYS
Reuters - Lananh Nguyen (2023-06-05)
“As he has said in the past, Jamie has no plans to run for office," the company said in a statement. "He is very happy in his current role.”
BANK OF CANADA RATE HIKE A POSSIBILITY THIS WEEK, ECONOMISTS SAY
G&M - Mark Rendell (2023-06-04)
For the first time in months, the possibility of another Bank of Canada interest-rate hike appears to be on the table this week.
WITH JUST DAYS TO SPARE, SENATE GIVES FINAL APPROVAL TO U.S. DEBT CEILING DEAL, SENDING IT TO BIDEN
G&M - LISA MASCARO, KEVIN FREKING, STEPHEN GROVES AND FARNOUSH AMIRI (2023-06-02)
Approval in the Senate on a bipartisan vote, 63-36, somewhat reflected the overwhelming House tally the day before, relying on centrists in both parties to pull the Biden-McCarthy package to passage – though Democrats led the tally in both chambers.
PWC CONTRACTS FROZEN BY $191 BILLION AUSTRALIAN PENSION FUND
Yahoo Finance (2023-06-02)
The Australian arm of the global consulting giant has faced intense scrutiny following revelations that a former senior partner obtained confidential tax policy information while advising the government. PwC then leaked the advice to colleagues who used it to advise global clients. The firm is now under pressure over how many employees were aware the information was being leaked.
LEGISLATION INTRODUCED TO PREVENT FEDERAL RESERVE'S CBDC PILOT PROGRAM: THE DIGITAL DOLLAR DEBATE CONTINUES
Tokenpost (2023-06-02)
The legislative action aims to impose a blanket restriction on the Federal Reserve, barring it from initiating, executing, or sanctioning any program built around examining the viability of CBDC issuance.
KENYA CENTRAL BANK SAYS DIGITAL CURRENCY NOT A 'COMPELLING PRIORITY'
Reuters (2023-06-02)
"On the global stage, the allure of CBDCs is fading," the bank said in a statement. "Implementation of a CBDC in Kenya may not be a compelling priority in the short to medium term."
CANADA’S ECONOMY OUTPERFORMS IN FIRST QUARTER, RAISING PRESSURE ON BOC AHEAD OF NEXT WEEK’S RATE DECISION
G&M - Mark Rendell (2023-06-01)
The Canadian economy grew at an annualized rate of 3.1 per cent in the first quarter, outperforming expectations while adding pressure on the Bank of Canada to raise interest rates again, perhaps as early as next week.
DEBT LIMIT DEAL HEADS TO VOTE IN FULL HOUSE WHILE MCCARTHY SCRAMBLES FOR GOP APPROVAL
Yahoo Finance (2023-05-31)
“We’re going to pass the bill,” McCarthy said as he exited the session.
REPUBLICANS HAIL BIG SPENDING CUTS THAT ECONOMISTS SAY WILL HAVE LITTLE IMPACT ON THE ECONOMY
Bloomberg - Edna Curran (2023-05-31)
US President Joe Biden and House Speaker Kevin McCarthy struck a deal on the federal debt ceiling over the weekend that, if approved by Congress, will avert a disastrous debt default.
POPULIST PREMIER DANIELLE SMITH OVERCOMES GAFFES TO WIN CLOSE-FOUGHT ALBERTA ELECTION
Reuters - Sam Jabri-Pickett and Nia Williams (2023-05-30)
United Conservative Party (UCP) leader Danielle Smith's election victory in Canada's main oil-producing province Alberta on Monday is likely to herald further friction with Liberal Prime Minister Justin Trudeau, particularly over climate change.
BIDEN AND MCCARTHY REACH A FINAL DEAL TO AVOID U.S. DEFAULT AND NOW MUST SELL IT TO CONGRESS
G&M - LISA MASCARO, MARY CLARE JALONICK, FARNOUSH AMIRI AND MICHELLE L. PRICE (2023-05-29)
With days to spare before a potential first-ever government default, President Joe Biden and House Speaker Kevin McCarthy reached final agreement Sunday on a deal to raise the nation’s debt ceiling and worked to ensure enough support in Congress to pass the measure in the coming week.
THE US' AAA CREDIT RATINGS AT RISK OF A DOWNGRADE DUE TO 'BRINKMANSHIP OVER THE DEBT CEILING.' THIS COULD IMPACT TRILLIONS OF DOLLARS WORTH OF TREASURY SECURITIES.
Yahoo Finance - Huileng Tan (2023-05-26)
The US debt ceiling impasse has hit a crucial stage — the country's prized AAA credit rating is at risk, which could impact the pricing of trillions of dollars worth of Treasury debt securities.
SENATOR ON A MISSION TO MAKE FINANCE INDUSTRY PRIORITIZE CLIMATE OBJECTIVES
G&M (2023-05-25)
Rosa Galvez is a senator on a mission to get the finance industry to live up to its proclamations of aligning its business with climate objectives.
CANADIANS SHOULD NOT EXPECT BOC TO RETURN TO LOW RATES, MACKLEM SAYS
G&M - Mark Rendell (2023-05-19)
“Nobody should expect that interest rates are going to go back down to the very low levels that we’ve seen over the last decade or so,” Mr. Macklem told reporters following the release of the central bank’s annual Financial System Review.
ECB EYES ADDITIONAL STEPS TO TACKLE BANK DEPOSIT RISKS
Reuters (2023-05-19)
The European Central Bank is considering whether requirements tailored for individual lenders could help address the risks arising for those holding large amounts of uninsured deposits, a document showed.
LOONIE POISED FOR RALLY AS TRADERS BET ON BANK OF CANADA RATE HIKES
Bloomberg - Anya Andrianova and Robert Fullem (2023-05-18)
The loonie is well-positioned to revisit its strongest level of the year as traders boost wagers that the Bank of Canada will resume interest rate hikes.
THIS IS WHY NEW YORK WILL ULTIMATELY COLLAPSE
Youtube - STEVE FORBES (2023-05-17)
Steve Forbes reveals the policies and factors that are leading to the collapse of New York
OTTAWA, WE HAVE A PROBLEM: IS CANADA’S ECONOMY HEADING TOWARD DISASTER?
G&M - George Athanassakos (2023-05-17)
Canada’s politicians seem to be making the same mistakes politicians in Argentina and South Africa did. They behaved as if their countries’ wealth was endless, and look where they are now.
DOES CANADA REALLY NEED A DIGITAL LOONIE?
CBC - Peter Armstrong (2023-05-16)
"It seems like this is a solution looking in vain for a problem to solve," said Karl Schamotta, chief market strategist at the financial payments company Corpay.
FRENCH AUTHORITIES SEEK €2.5BN FROM BANKS OVER TAX FRAUD PROBE
FT - Leila Abboud, Sarah White (2023-05-16)
The French government is seeking to recover €2.5bn in back taxes from several banks, including some of the country’s largest lenders, over a scheme they are alleged to have used to avoid taxes linked to dividend payments. Gabriel Attal, the minister for the budget, gave the figure in a public Senate hearing earlier this month, but did not name the banks that had been issued with the demands. It is the first time that the French government has given a figure for the potential losses to public coffers from the so-called cum-cum trades, or transactions designed to seek tax advantages tied to the payment of dividends.
OTTAWA’S MORTGAGE BOND PROPOSAL DRAWS CONCERNS FROM BAY STREET
G&M - Mark Rendell (2023-05-15)
Bay Street bond dealers and investors are raising concerns about a proposed change to Canada’s housing finance system that would transform the $260-billion Canada Mortgage Bonds market and see the federal government financing a significant portion of the country’s mortgage lending out of its own borrowing.
RHYS MENDES APPOINTED AS DEPUTY GOVERNOR OF THE BANK OF CANADA
BOC (2023-05-13)
Since 2021, Mr. Mendes has been on secondment to the Department of Finance, where he was serving as Assistant Deputy Minister. Mr. Mendes joined the Bank in 2004. He held increasingly senior positions before being appointed Deputy Managing Director of the Canadian Economic Analysis Department in 2013, Managing Director of Economic and Financial Research in 2016, then Managing Director of the Bank of Canada’s International Economic Analysis Department in 2017.
DIMON JABS AT TRUMP ON DEBT CEILING, SAYS JPMORGAN HAS WAR ROOM
Bloomberg (2023-05-12)
JPMorgan Chase & Co.’s Jamie Dimon took a jab at Donald Trump for encouraging Republican lawmakers to dig in over raising the debt limit even if it means default — an outcome his bank is prepping for by convening a weekly war room.
FED'S BOWMAN: MORE POLICY TIGHTENING LIKELY APPROPRIATE
Yahoo Finance (2023-05-12)
The U.S. Federal Reserve will probably need to raise interest rates further if inflation stays high, Fed Governor Michelle Bowman said on Friday, adding that key data so far this month has not convinced her that price pressures are receding.
YELLEN TO DISCUSS DEBT CEILING WITH BANK LOBBY GROUP
Reuters (2023-05-12)
Yellen's meeting with the board - which includes the chief executives of JP Morgan (JPM.N), Jamie Dimon, and of Citigroup's (C.N), Jane Fraser - was first reported by Politico.
DIPLOMATIC EXPULSIONS GIVE CANADA NEW CAUSE TO STEER AWAY FROM CHINA ON TRADE POLICY, EXPERTS SAY
G&M (2023-05-10)
Canadian wheat sales to China began within a decade of Mao Zedong’s revolutionary victory. For many years, the Canadian International Development Agency, which administered foreign aid programs, was a pillar of Ottawa’s engagement with Beijing.
CANADA DECLARES CHINESE DIPLOMAT ZHAO WEI ‘PERSONA NON GRATA’ OVER FOREIGN INTERFERENCE
G&M - Bill Curry (2023-05-09)
The extraordinary expulsion – the first of a Chinese diplomat in decades – carries substantial consequences given the size of Canada’s economic and social ties with China. It is Canada’s second-largest trading partner and second-highest source of immigration.
U.S. FEDERAL RESERVE RAISES KEY RATE BUT HINTS IT MAY PAUSE AMID BANK TURMOIL
G&M - Christopher Rugaber (2023-05-04)
In a statement after its latest policy meeting, the Fed removed a sentence from its previous statement that had said “some additional” rate hikes might be needed. It replaced it with language that said it will weigh a range of factors in “determining the extent” to which future hikes might be needed.
PSAC AGREEMENT SETS STAGE FOR OTHER UNIONS TO PUSH FOR MORE
G&M - Bill Curry (2023-05-02)
The labour deal that ended a historic strike by federal government employees is expected to serve as a catalyst for workers across Canada to push for higher wages in an inflationary environment.
AUSTRALIAN CENTRAL BANK HIKES INTEREST RATE TO 3.85%
Yahoo Finance (2023-05-02)
“Inflation in Australia has passed its peak, but at 7% is still too high and it will be some time yet before it is back in the target range,” Lowe said in a statement.
JAPAN ECONOMY MINISTER GOTO URGES US BANKS, REGULATORS TO TACKLE LIQUIDITY RISKS
Yahoo Finance - Tetsushi Kajimoto and Yoshifumi Takemoto (2023-05-02)
"The BOJ as central bank should tackle monetary policy operations, but I don't see the current financial situation impacting Japan's economy and financial sector as a whole.
FED IS SET TO RAISE RATES YET AGAIN. THEN WHAT?
Investment Executive - Christopher Rugaber (2023-05-02)
Seven of the Fed’s 18 policymakers, though, projected that rates would exceed 5.1%, while only one policymaker forecast a lower rate. That suggested that the Fed as a whole was leaning toward additional hikes.
A REVIEW OF THE BANK OF CANADA’S SUPPORT OF KEY FINANCIAL MARKETS DURING THE COVID-19 CRISIS
BOC - Joshua Fernandes and Michael Mueller (2023-05-02)
We describe how the Bank of Canada responded to the rapidly deteriorating liquidity in core Canadian fixed-income markets.
U.S. REGULATORS SEIZE FIRST REPUBLIC BANK, SELL TO JPMORGAN CHASE
G&M (2023-05-01)
Regulators had been working to find a way forward before U.S. stock markets opened Monday. San Francisco-based First Republic has struggled since the collapses of Silicon Valley Bank and Signature Bank in early March. They added to worries that the bank may not survive as an independent entity for much longer.
CURRENCIES IN LIMBO AWAITING PACKED WEEK OF CENTRAL BANKS
Yahoo Finance - Stella Qiu (2023-05-01)
"The focus will be on revisions to the forward guidance in its statement," analysts at Goldman said in a note to clients.
CAROLYN WILKINS HOPES OTHER CENTRAL BANKS LEARN LESSONS FROM AUSTRALIA
G&M - DAVID PARKINSON (2023-05-01)
What the RBA and the Bank of Canada have gone through isn’t unique. Central banks around the world got fooled by the inflation surge that began in 2021, and have been scrambling to catch up over the past year. What was unique was the economic upheaval caused by the pandemic, which didn’t fit any past scenarios that were built into the predictive statistical models on which central banks depend.
US REGULATORS TO RELEASE REVIEWS OF LARGEST BANK FAILURES SINCE 2008 CRISIS
Yahoo Finance - Ann Saphir and Hannah Lang (2023-04-28)
In back-to-back reports due on Friday, the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) are also expected to float a number of fixes that may lay the groundwork for tougher U.S. bank-sector regulation and supervision ahead - moves likely to elicit pushback from an industry eager to hang onto the regulatory reprieves it won several years ago.
BBC'S SHARP RESIGNS AFTER BREACHING RULES OVER BORIS JOHNSON LOAN
BBC (2023-04-28)
BBC Chairman Richard Sharp resigned on Friday after an independent report found he had breached public appointment rules by not disclosing potential conflict of interest in his role in securing a $1 million loan for the then-prime minister, Boris Johnson.
BANK OF CANADA CONSIDERED INTEREST-RATE INCREASE IN APRIL, MINUTES SHOW
G&M - Mark Rendell (2023-04-27)
Bank of Canada officials considered whether to raise interest rates again on April 12, according to a summary of the deliberations that led to the latest monetary policy decision – a sign that the central bank is leaning more toward rate hikes than cuts as it waits for inflation to fall.
ECB SETS OUT LATEST DIGITAL EURO THINKING
Finextra (2023-04-26)
In its initial releases, a digital euro would be accessible to euro area residents, merchants and governments. Non-resident euro area citizens might also have access, provided that they held an account with a euro area-based payment services provider.
STRIKING FEDERAL WORKERS WILL CONTINUE GETTING REGULAR SALARIES UNTIL AT LEAST MAY 10
G&M - Vanmala Subramaniam (2023-04-26)
Striking federal public servants will continue to receive their regular salaries until at least May 10, according to the government, though they will likely have their pay clawed back at a later date for the days they had spent on the picket line.
BANK OF CANADA BEGINS DISCLOSING CLIMATE-RELATED RISKS
G&M - Mark Rendell (2023-04-26)
The Bank of Canada began disclosing climate-related risks to its operations and balance sheet this week – a move intended to inspire other financial institutions to raise their game on climate-related disclosure.
SWISS FRANC WINS BATTLE OF FX HAVENS WITH FOUR-DECADE HIGH AGAINST YEN
Yahoo Finance - Yumi Teso, Hiroko komiya (2023-04-25)
The Swissie has hit levels last seen in 1980 as investors wager that the Bank of Japan will keep its ultra-loose monetary policy unchanged Friday, a decision which may weigh on the Japanese currency. The Swiss National Bank removed negative rates last year and began its hiking cycle.
CANADA'S STRIKING WORKERS CLOSER TO RESOLVING WAGE, REMOTE WORK ISSUES
Yahoo Finance - Divya Rajagopal (2023-04-24)
The revenue agency workers wanted a pay hike of 22.5% over three years, while the Treasury Board workers who oversee federal government administration were seeking a 13.5% pay rise over three years. The government offered both groups a 9% increase over three years.
CHINA GUIDES BANKS TO FURTHER CUT DEPOSIT RATES
Reuters (2023-04-24)
China nudged banks this month to cut deposit interest rates further, seven people with knowledge of the matter said, in the latest effort to channel the country's vast savings pool into spending and more productive investments.
FED TILTS TOWARD RATE HIKE, WITH A POSSIBLE PAUSE IN VIEW AS LENDING SLOWS
Yahoo Finance - Howard Schneider (2023-04-21)
Overall bank credit did fall about 1.5% in the three weeks from Wednesday, March 15 to Wednesday April 5, and there were initial outflows of deposits from smaller banks to larger ones. But those flows quickly stabilized, and the Fed's recent Beige Book compendium of observations about the economy showed the lending impact seemingly regionalized, not evolving into an imminent national credit crash.
FED IN DISCUSSIONS WITH BANKS ABOUT MANAGING RISKS OF AI: WALLER
Reuters - Ann Saphir and Hannah Lang (2023-04-21)
ONE OF THE LARGEST STRIKES IN CANADIAN HISTORY GRINDS SOME PUBLIC SERVICES TO A HALT
G&M - VANMALA SUBRAMANIAM, BILL CURRY, MARK RENDELL (2023-04-20)
A nationwide strike of more than 150,000 federal public servants has ground some critical services to a halt, even as both the union and the government remain at the bargaining table.
FEDERAL WORKERS TO STRIKE WEDNESDAY IF UNION, GOVERNMENT DON'T REACH DEAL BY TUESDAY
Yahoo Finance (2023-04-18)
The Public Service Alliance of Canada says some 155,000 employees are prepared to walk off the job beginning Wednesday, including 35,000 workers from the Canada Revenue Agency.
OSFI LAUNCHES STABLECOIN CONSULTATION
Investment Executive - James Langton (2023-04-18)
“While these cryptoassets have yet to achieve mainstream adoption as a means of payment, associated financial activities have the potential to present risks to the financial system,” OSFI said in a letter accompanying the consultation.
EUROPEAN CENTRAL BANK TO LIFT DEPOSIT RATE TO 3.75% PEAK IN JULY, SURVEY SHOWS
Yahoo Finance - Zoe Schneeweiss and Harumi Ichikura (2023-04-17)
“At some point, it’s only natural that the step size is reduced — for example, the increase could be not 50 basis points, but 25 basis points,” he said, according to the Baltic country’s Leta news service.
CENTRAL BANKS HAVE YET TO SCRIPT FINAL ACT OF INFLATION FIGHT AS RISKS RISE
Yahoo Finance - Howard Schneider and Balazs Koranyi (2023-04-17)
Major central banks may be deep into their drive to raise interest rates in hopes of killing inflation, but the endgame remains far from clear as price increases prove harder to slow than expected, and analysts caution that financial markets could still break along the way.
YELLEN SAYS US BANKS MAY TIGHTEN LENDING AND NEGATE NEED FOR MORE RATE HIKES
Reuters - David Lawder (2023-04-17)
U.S. Treasury Secretary Janet Yellen said banks are likely to become more cautious and may tighten lending further in the wake of recent bank failures, possibly negating the need for further Federal Reserve interest rate hikes.
OSFI LAUNCHES CONSULTATION ON FIAT-REFERENCED CRYPTO-ASSET ARRANGEMENTS AND ACTIVITIES
OSFI (2023-04-17)
Fiat-referenced crypto-assets are the most prevalent type of stablecoin. They have gained in popularity within the growing crypto-assets market and have the potential to present risks to the Canadian financial system.
BANK OF CANADA’S MACKLEM SAYS INFLATION FALLING QUICKLY, BUT EMPHASIZES LONGER FIGHT TO RETURN TO 2 PER CENT
G&M - Mark Rendell (2023-04-14)
Inflation should fall quickly in the coming months, but getting it back to 2 per cent could be a long slog, Bank of Canada Governor Tiff Macklem said Thursday, suggesting that interest rates may need to remain elevated for some time.
BANK OF CANADA HOLDS STEADY ON BORROWING COSTS, KEEPING KEY RATE UNCHANGED AT 4.5%
G&M - Mark Rendell (2023-04-13)
The Bank of Canada held interest rates steady on Wednesday while pushing back against market expectations that it will start cutting rates later this year.
BANK OF CANADA Q+A: WHERE DO INTEREST RATES GO FROM HERE?
FP - Kevin Carmichael (2023-04-13)
Financial Post editor-in-chief Kevin Carmichael was in Ottawa on April 12, for the Bank of Canada’s decision, economic forecast and news conference.
FED’S MEETING MINUTES TO DETAIL HOW OFFICIALS WEIGHED BANK RISKS
Yahoo Finance - Catarina Saraiva (2023-04-12)
Powell, at the post-meeting press conference in March, said officials were stumped by the rapid run on SVB. And New York Fed President John Williams this week said he didn’t think there was a link between the Fed’s aggressive rate increases and stress in the banking sector.
BLACKROCK TO SELL $114 BILLION OF FAILED BANKS’ SECURITIES
Yahoo Finance - Dan Reichl and Silla Brush (2023-04-11)
BlackRock Inc. was hired by US regulators to help sell $114 billion in securities it amassed from failed lenders Signature Bank and Silicon Valley Bank, returning the asset-manager to its role as an adviser to the government in times of crisis.
LIBERAL TAX PROMISE TRACKER, POST-BUDGET EDITION
Investment Executive - Malissa Shin (2023-04-11)
There were no major surprises in the federal budget tabled on March 28, and the financial services industry received long-awaited clarity on several files. That said, some tax issues still linger.
BANK OF CANADA TO STAY ON PAUSE DESPITE STRONG ECONOMIC GROWTH
Bloomberg - Erik Hertzberg (2023-04-11)
Canada’s economy was supposed to be stalling by now. It’s still charging ahead, creating a challenge for the central bank as it prepares to hold its policy rate at 4.5% for a second straight decision.
FULL IMPACT OF PAST BANK OF CANADA INTEREST RATE HIKES NOT YET SEEN: EXPERT
BNN (2023-04-11)
The Bank of Canada is widely expected to keep interest rates on hold Wednesday as a string of aggressive hikes has yet to be fully reflected within the economy, one expert says.
FED TO DETERMINE 'WHAT, IF ANY' MORE RATE ACTION IS NEEDED -HARKER
Reuters (2023-04-11)
"Since the full impact of monetary policy actions can take as much as 18 months to work its way through the economy, we will continue to look closely at available data to determine what, if any, additional actions we may need to take," Harker said in a speech at the Wharton Initiative on Financial Policy and Regulation.
'THE WARNING SIGNS WERE THERE' BEFORE SVB CRISIS HIT, CAROLYN WILKINS SAYS
Yahoo Finance (2023-04-11)
“I think the warning signs were there ahead of time and people were talking about them,” Wilkins said, noting that rising interest rates that contributed to the crisis were no secret. “The Fed couldn’t have been any clearer that it was raising interest rates.”
LIQUIDITY RULES NEED RETHINK AFTER SILICON VALLEY BANK CRASH, SAYS CARNEY
Yahoo Finance - Huw Jones (2023-04-05)
"That will, I think, require some rethinking of the assumptions behind liquidity coverage ratio, the net stable funding ratio," Carney said, referring to the LCR and NSFR.
UK SLAPS LEVY ON REGULATED ENTITIES TO HELP FUND MONEY LAUNDERING FIGHT
Pymnts (2023-04-04)
The roughly 4,000 AML-regulated entities within the scope of the levy will be organizations with U.K. revenue exceeding £10.2 million (about $10.6 million) per year, which will pay a fixed annual charge of either £10,000, £36,000 or £250,000 depending on the revenue bracket they fall in.
GOVERNMENT BANK RESCUES NEVER WENT AWAY. JUST DON’T CALL THEM BAILOUTS
G&M - Eric Reguly (2023-04-03)
The term bank “bailout” has disappeared from the financial lexicon. It implied taxpayer-funded rescues equivalent to the GDP of a small country, rescuing the rich from the fallout of hopeless investments and protecting inept executives from lynchings at the hands of wronged depositors, clients and shareholders.
BIDEN PRESSURES US REGULATORS TO TOUGHEN BANK RULES
Yahoo Finance - David Hollerith and Jennifer Schonberger (2023-03-31)
One Republican lawmaker said the Fed already has the power to hold banks like Silicon Valley Bank accountable and it failed to do so. “Instead of giving more authority to regulators who were asleep at the wheel before these bank failures, we should hold them accountable for their inability to utilize their existing supervisory tools,” said Patrick McHenry, chair of the House Financial Services Committee.
CHINA CALLS US DEBT TRAP ACCUSATION 'IRRESPONSIBLE'
ReReuters (2023-03-31)
Yellen on Wednesday said she was concerned by some of China's activities globally, particularly its lending to developing countries. She told U.S. lawmakers in a hearing that Washington was working hard to counter China's influence in international institutions and in lending to developing nations.
BANK OF CANADA SEES QUANTITATIVE TIGHTENING ENDING BY 2025
Bloomberg - Randy Thanthong-Knight (2023-03-30)
A Bank of Canada official said quantitative tightening will likely end in late 2024 or the first half of 2025, at which point the central bank would start buying assets again.
CANADA MAY BOOST DEPOSIT INSURANCE IF MARKETS FACE ‘DISRUPTION’
Bloomberg - Derek Decloet (2023-03-30)
Canada may amend its deposit insurance law to increase protection limits if needed to calm a “market disruption,” according to Finance Minister Chrystia Freeland’s new budget.
BUDGET TARGETS BILLIONS FROM BANKS WITH CHANGE TO DIVIDEND TAX
G&M - Stefanie Marotta (2023-03-29)
Ottawa is planning to raise billions of dollars from banks and insurers through a change in tax rules on dividends that financial institutions receive from Canadian companies.
US EXPECTS BIDEN'S NOMINEE, AJAY BANGA, TO BE ELECTED AS WORLD BANK CHIEF
Yahoo Finance (2023-03-29)
Banga, 63, recently completed a three-week world tour to meet government leaders, civil society groups and others in borrowing and donor countries as he campaigned for the bank's top post.
US REGULATOR CITES 'TERRIBLE' RISK MANAGEMENT FOR SILICON VALLEY BANK FAILURE
Reuters - Pete Schroeder, Hannah Lang (2023-03-29)
A top U.S. regulator told a Senate panel on Tuesday that Silicon Valley Bank did a "terrible" job of managing risk before its collapse, fending off criticism from lawmakers who blamed bank watchdogs for missing warning signs.
LESSONS FROM OUR SUPPORT OF FINANCIAL MARKETS IN TOUGH TIMES
BOC - Toni Gravelle (2023-03-29)
Deputy Governor Toni Gravelle talks about how the Bank of Canada supported markets during the COVID-19 pandemic and what we might do differently in the future. He also discusses recent turmoil in the banking system in the United States and overseas.
FED RAISES RATE DESPITE TURMOIL IN FINANCIAL SYSTEM
G&M - Mark Rendell (2023-03-23)
The U.S. Federal Reserve pressed ahead with its ninth consecutive interest rate hike, but signalled that it may be near the end of its monetary policy tightening campaign as it grapples with the most serious banking crisis since 2008.
SWITZERLAND’S EMERGENCY RESCUE OF CREDIT SUISSE COULD COST $13,500 FOR EACH AND EVERY SWISS PERSON
Fortune - Bryce Baschuk, Bastian Benrath (2023-03-23)
To backstop the emergency sale of Credit Suisse Group AG to its Zurich rival UBS Group AG, the Swiss government pledged to make as much as 109 billion francs available — a hefty burden for the country of 8.7 million people.
CENTRAL BANKS IN A BIND OVER BURGEONING FINANCIAL CRISIS AND INFLATION
G&M - Mark Rendell (2023-03-21)
For the past year, central banks including the Bank of Canada have fought to get inflation under control with single-minded determination. Over the past week, they’ve added a second task: stopping contagion from spreading through the global financial system after the collapse of Silicon Valley Bank and the emergency takeover of Credit Suisse.
COORDINATED CENTRAL BANK ACTION TO ENHANCE THE PROVISION OF U.S. DOLLAR LIQUIDITY
Federal Reserve (2023-03-21)
The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing a coordinated action to enhance the provision of liquidity via the standing U.S. dollar liquidity swap line arrangements.
EUROPE'S CENTRAL BANK HIKES INTEREST RATES BY 50 BASIS POINTS DESPITE BANK CHAOS SOCIAL SHARING
CBC (2023-03-17)
The ECB hiked rates by half a percentage point Thursday, underlining its determination to fight high inflation of 8.5 per cent. In a statement, the bank called the banking sector in the 20 countries using the euro currency "resilient," with strong finances.
ECB MEETS OVER BANKING STRESS AS US RESCUE EASES IMMEDIATE FEARS
Reuters - Balazs Koranyi, Pete Schroeder (2023-03-17)
"The Supervisory Board is meeting to exchange views and to provide members with an update on recent developments in the banking sector," an ECB spokesperson told Reuters.
CHINA CUTS BANKS' RESERVE RATIO FOR FIRST TIME IN 2023 TO SUPPORT RECOVERY
Reuters - Ellen Zhang (2023-03-17)
China's central bank said on Friday it would cut the amount of cash that banks must hold as reserves for the first time this year to help keep liquidity ample and support a nascent economic recovery.
VCS ASK TRUDEAU FOR LIFELINE TO REPLACE SVB CREDIT IN CANADA
Bloomberg - Estaban Duarte (2023-03-17)
A group representing Canada’s venture capital sector is asking Prime Minister Justin Trudeau’s government to provide emergency financing to help startups affected by the collapse of Silicon Valley Bank.
EXPERTS, BANKS IN U.S. LOOK FOR IDEAS TO STOP NEXT BANK FAILURE
Investment Executive - Ken Sweet (2023-03-17)
Congress decided to provide relief from the Dodd-Frank legislation. Among other things, it ditched the $50 billion asset threshold for the most stringent oversight, pushing it up to $250 billion. Many large lenders, including Silicon Valley Bank, were thereby freed from the tightest regulatory scrutiny.
MARK CARNEY’S CLIMATE PROGRAMS AT THE BANK OF ENGLAND TO BE DEFUNDED
TrueNorth - Ellen Milligan and Philip Aldrick (2023-03-16)
Climate programs will slip lower on the central bank’s agenda so officials can focus more on the core operations such as financial stability, markets and a digital currency, according to a person with knowledge of the situation who asked not to be named. The BOE’s climate work currently focuses on building ESG disclosure guidelines, preparing insurers for risks from rising global temperatures and getting banks to carbon-test their balance
OSFI TO START DAILY MONITORING OF CANADIAN BANKS’ LIQUIDITY IN WAKE OF SVB FAILURE
G&M - Tim Kiladze (2023-03-14)
last used in the early months of the COVID-19 pandemic, designed to provide an early warning if any signs of stress emerge.
CIRCLE STABLECOIN’S WILD WEEKEND RAISES RISK OF REGULATORY SCRUTINY
Yahoo Finance - Olga Kharif (2023-03-14)
Market overseers, their hands already full with the biggest US bank failure in a decade, were forced over the weekend to contend with a drama playing out in a section of finance that has been trying their patience for months: crypto. That’s where USD Coin’s supposedly immutable bond with the dollar came asunder, when it was revealed about 8% of the reserves backing it were stuck at the collapsed lender.
FDIC WILL PROTECT ALL SILICON VALLEY BANK DEPOSITS AFTER SUDDEN COLLAPSE, TREASURY SAYS
Forbes - Joe Walsh (2023-03-13)
Federal regulators will safeguard all deposits at Silicon Valley Bank, including money that isn’t normally covered by federal deposit insurance, the Treasury Department announced Sunday evening, a rare and sweeping move designed to prevent the tech-focused bank’s rapid collapse from infecting the rest of the U.S. financial system.
YELLEN RULES OUT BAILOUT FOR SILICON VALLEY BANK
Forbes - Marisa Dellatto (2023-03-13)
The federal government will not bail out the “investors and owners” of Silicon Valley Bank, Treasury Secretary Janet Yellen said Sunday on Face The Nation, saying the situation is different from the 2008 financial crisis, as the tech industry reels from the bank’s sudden collapse amid fears of broader financial industry contagion.
OSFI TAKES CONTROL OF SILICON VALLEY BANK’S CANADIAN UNIT
G&M - Andrew Willis (2023-03-13)
Canada’s banking regulator took control of Silicon Valley Bank’s domestic operations on Sunday, as governments, along with tech sector CEOs, spent the weekend scrambling to limit the impact of a leading global technology financer’s sudden collapse.
FINANCIAL TREMORS NOW MUDDYING FED INFLATION DEBATE
Yahoo Finance - Howard Schneider (2023-03-13)
"The threat of a systemic disruption in the banking system is small, but the risk of stoking financial instability may well encourage the Fed to opt for a smaller rate increase at the upcoming meeting," Oxford Economics economist Bob Schwartz wrote on Friday after SVB was closed by regulators and as officials began examining how to respond to the largest bank failure since the 2007 to 2009 financial crisis.
BIDEN VOWS NEW BANK RULES AFTER SVB COLLAPSE, CITES TRUMP ROLLBACK
G&M (2023-03-13)
President Joe Biden declared the US banking system “safe” and vowed stiffer bank regulation, after U.S. regulators were forced to step in with a series of emergency measures after Silicon Valley Bank and Signature Bank collapse, threatening to trigger a broader crisis.
BANK OF CANADA HOLDS KEY RATE STEADY AT 4.5%
G&M - BARRIE MCKENNA AND MARK RENDELL (2023-03-09)
The Bank of Canada held its benchmark interest rate steady at 4.5 per cent Wednesday, pausing its year-long campaign to increase borrowing costs while leaving the door open to further rate hikes if inflation doesn’t slow as quickly as expected.
The widely anticipated decision makes the Bank of Canada the first major central bank to halt monetary policy tightening and puts it on a different trajectory than the U.S. Federal Reserve, whose officials have said they expect to increase interest rates several more times.HOW THE U.S. SPENT $1.4 TRILLION IN DEBT LAST YEAR, EXPLAINED WITH PENNIES
Yahoo Finance (2023-03-09)
The U.S. relies on debt for much of its spending — but what would spending cuts look like? WSJ explains how much the Treasury relies on debt, where it goes and what happens when the Treasury hits the debt ceiling.
BANK OF CANADA AND FED HEAD FOR HISTORIC DIVERGENCE, IN A BLOW TO LOONIE
Yahoo Finance - Fergal Smith (2023-03-09)
Canadian inflation slowed more than expected to 5.9% in January and gross domestic product was flat in the fourth quarter, held back by weakness in the interest rate-sensitive parts of the economy, including housing investment as well as business spending on machinery and equipment.
BANK OF CANADA HOLDS RATES, BUT IT WILL STILL DRIVE BORROWING COSTS HIGHER
Better Dwelling (2023-03-09)
The BoC is now in the process of trying to reduce some of the epic stimulus it injected into the system. It used QE for the first time in 2020, increasing the balance sheet by nearly 5x to $575.3 billion in March 2021. That was the peak holding, and as intended—it helped flood the market with excess capital. Shortly after, a generational high for inflation appeared. Mission accomplished, but it might have been a little too effective, requiring undoing.
US. CENTRAL BANK WILLING TO RAISE RATES EVEN HIGHER AND FASTER, JEROME POWELL TELLS LAWMAKERS
CBC (2023-03-08)
The Federal Reserve could increase the size of its interest rate hikes and raise borrowing costs to higher levels than previously projected if evidence continues to point to a robust economy and persistently high inflation, Chair Jerome Powell told a Senate panel Tuesday.
WEALTH ONE FINED $676,500 FOR FAILING TO COMPLY WITH ANTI-MONEY LAUNDERING LAW
G&M - Steven Chase, Robert Fife (2023-03-07)
The country’s anti-money laundering watchdog has fined Wealth One Bank of Canada – a bank established to cater to Chinese-Canadians – for failing to comply with a federal law designed to stop terrorist financing and the illegal concealment of the origins of funding.
BANK OF CANADA RISKS FALLING TOO FAR BEHIND FED, SCOTIA SAYS
Bloomberg - Kevin Orland (2023-03-07)
The Bank of Canada is limited in how much its interest rate increases can lag behind those of the Federal Reserve, with the gap threatening to weaken its currency and fuel inflation, according to an economist at Bank of Nova Scotia.
BANK OF CANADA IS “CONDITIONALLY” PAUSING HIKES, BUT WHAT DOES THAT MEAN?
Better Dwelling (2023-03-07)
Inflation is still going to be front and center, but he sees the BoC looking at short-term trends. The 3-month annualized growth rate is likely to be in focus, according to Reitzes. They’ll be sensitive to any signs of acceleration, or deceleration. Countries like the US are facing reemerging inflation pressures, and any rate hikes in excess of Canada can spark inflation via a weak loonie.
IF OTTAWA HAS NATIONAL SECURITY CONCERNS ABOUT A BANK’S FOUNDERS, A ‘STERN LETTER’ DOESN’T CUT IT
G&M - Rita Trichur (2023-03-06)
It was a quintessential Canadian response to suspected national security threats and possible money laundering.
NAGEL BACKS FASTER QT WITH MORE BIG ECB RATE HIKES POSSIBLE
Yahoo Finance - Alexander Weber (2023-03-01)
Quantitative easing enacted in the wake of the 2008 global financial crisis is now triggering hefty losses across Europe after commercial lenders deposited some of the money created with central banks — forcing them into ever-increasing interest payouts as rates are lifted to stem inflation.
BANK OF ENGLAND SAYS DIGITAL POUND "MORE LIKELY THAN NOT"
Finextra (2023-02-28)
Asked by the Committee, on a scale of one to 10, how likely it is that a digital bank central currency will be needed, Cunliffe said: “I'd say, I'm not sure it would be helpful to put a number on it… I'd just say it's more likely than not.”
CANADIAN SECURITIES REGULATORS ENCOURAGE MARKET PARTICIPANTS TO PREPARE FOR THE CESSATION OF CDOR
OSC (2023-02-28)
“The cessation of CDOR is consistent with international restructuring of interest rate benchmarks,” said Stan Magidson, CSA Chair and Chair and CEO of the Alberta Securities Commission. “It is important that market participants make appropriate transition arrangements to prevent business and market disruptions following the cessation date.”
MISTRUST OF XI ENDANGERS ONE OF WALL STREET’S FAVORITE TRADES
Bloomberg - Sofia Horta e Costa, Henry Ren and Tania Chen (2023-02-27)
After triggering a years-long exodus of foreign investors from Chinese markets, President Xi Jinping looked like he’d cracked the formula to revive his economy and lure back global funds.
WORLD BANK OPENS NOMINATIONS FOR MALPASS SUCCESSOR THURSDAY
Yahoo Finance - Eric Martin (2023-02-23)
The World Bank on Thursday will open a five-week period for nominations to succeed President David Malpass, days after he announced his early departure from the anti-poverty lender, and expects to select a new chief by early May.
TODAY'S DEBT CEILING IS TOMORROW'S DREADED DEBT BOMB
Bloomberg - Karl W. Smith (2023-02-23)
As disconcerting as the US’s current debt situation is, the outlook is even worse. When the bi-partisan Congressional Budget Office updated its forecasts last week, it estimated that debt held by the public will climb to $46 trillion by 2033 from $31 trillion currently.
This puts the country one step closer to the dreaded “debt bomb“ scenario, which would make today’s battle over whether to raise the $31 trillion debt ceiling look quaint in comparison.
EMERGING PAYMENT POLICY: CENTRAL BANK DIGITAL CURRENCY AND PAYMENTS CANADA ROLE
Payments Canada - Payments Canada (2023-02-23)
As Payments Canada continues to examine issues and a potential role within CBDC, it will be important to consider Payments Canada’s public policy objectives. These include the continued promotion of safety, soundness and efficiency of our payment systems while making the interests of end-users a priority.
LOOMING U.S. DEFAULT RISK PROMPTS INVESTORS TO CUT SOME DEBT EXPOSURE
Reuters - Davide Barbuscia, Saeed Azhar (2023-02-21)
The U.S. Treasury hit its $31.4 trillion borrowing limit last month. Unless congress raises or suspends that cap, the government could begin to default on bonds that underpin the global financial system and are considered some of the safest investments.
ASIA CENTRAL BANKS MAY NEED TO KEEP HIKING IF CORE INFLATION STAYS HIGH, IMF SAYS
Bloomberg - Claire Jiao (2023-02-21)
Asia’s central banks may need to raise interest rates further if core inflation does not show clear signs of returning to target, according to the International Monetary Fund.
EURO AREA BRACES FOR ERA OF CENTRAL-BANK LOSSES AFTER QE BINGE
Yahoo Finance - Philip Aldrick (2023-02-20)
“Results will turn negative for many banks already in 2022, because of the mismatch of interest rates on assets and liabilities,” Bank of Portugal Governor Mario Centeno said in an interview. “We finance ourselves now at higher interest rates, which do not match the return of bonds and all sorts of debt in the central bank’s balance sheet.”
3 THINGS THE BANK OF CANADA SUBTLY TOLD US THIS WEEK
FP - Kevin Carmichael (2023-02-20)
But the decision to stay the course was suggestive, given Macklem’s appearance at the House finance committee and Beaudry’s speech at the University of Alberta represented the Bank of Canada’s first opportunities to tweak its message in the wake of the blowout jobs report on Feb. 10. Here’s what you need to know.
SENATE CALLS FOR MORE TRANSPARENCY FROM BANK OF CANADA
G&M - Mark Rendell (2023-02-17)
A Senate committee is calling for greater parliamentary oversight of the Bank of Canada as well as increased transparency, wading into a debate around central bank independence at a moment of heightened political interest in monetary policy.
CANADA HAS $300-BILLION CASH BUFFER TO SOFTEN BLOW OF COMING RECESSION, SAYS RBC'S CEO
FP (2023-02-16)
“Unprecedented liquidity” in the market will buoy Canada’s economy as it moves through a modest recession, said the head of the country’s largest bank.
Royal Bank of Canada chief executive Dave McKay, in an interview with BNN Bloomberg, said Canada is headed for a slowdown as higher interest rates designed to curb inflation slow consumer spending.
LARGE RUSSIAN BANKS CUT BACK ON OFZ BUYING IN JAN, SAYS CENTRAL BANK
Reuters (2023-02-16)
Large Russian banks' share of government debt purchases dropped to 59.5% in January, the central bank said on Thursday, down from 90.7% towards the end of 2022, as the finance ministry stopped issuing floating-rate bonds popular with lenders.
WHO COULD REPLACE WORLD BANK PRESIDENT DAVID MALPASS?
Reuters - Valerie Volcovici, Andrea Shalal and David Lawder (2023-02-16)
David Malpass, president of the World Bank, unexpectedly said he would resign in June on Wednesday, leaving open a job that oversees billions of dollars of funding and has a direct impact on poverty, climate change preparation, emergency aid and other issues in developing countries around the globe.
CANADA'S OVERHEATED ECONOMY IS STILL PUTTING UPWARD PRESSURE ON PRICES, SAYS TIFF MACKLEM
CBC (2023-02-16)
The governor's comments come after Statistics Canada's most recent labour force survey revealed the economy added 150,000 jobs last month as the unemployment rate hovers around record lows.
NO TWO WAYS ABOUT IT: WHY THE BANK IS COMMITTED TO GETTING BACK TO 2%
BOC - Paul Beaudry (2023-02-16)
The Bank is fully committed to returning inflation to the 2% target. For three decades, this target has served Canadians well. And since it represents a sweet spot on the inflation spectrum, it remains the centrepiece of the Bank’s inflation-targeting framework. Keeping inflation stable and predictable at that low level is the best contribution monetary policy can make to the economic and financial well-being of Canadians.1
SUE THE BOE? CITY MINISTER SURPRISES BANKERS WITH A NEW IDEA
Bloomberg - Katherine Griffiths (2023-02-16)
A UK government minister has suggested banks could sue the Bank of England over new rules that will force them to hold more capital for customer loans, potentially increasing borrowing costs for small businesses.
BIDEN WILL NAME FED’S LAEL BRAINARD AS HIS TOP ECONOMIC ADVISER
Bloomberg - Kate Davidson, Jennifer Jacobs and Josh Wingrove (2023-02-14)
President Joe Biden has decided to name Federal Reserve Vice Chair Lael Brainard as his top economic adviser, with an announcement coming as soon as Tuesday, people familiar with the matter said.
ROYAL CANADIAN MINT TEMPORARILY LAYS OFF 56 WORKERS AT ITS WINNIPEG FACILITY
G&M (2023-02-13)
The Royal Canadian Mint says it’s temporarily laying off 56 employees at its Winnipeg facility.
DIGITAL POUND POSES RISK TO BANKS: MOODY’S
Investment Executive - James Langton (2023-02-13)
“Under the consultation proposals, a digital pound would be a claim directly on the BoE, which would issue and record them on a core ledger of all digital pounds. Private companies would enable end-users to access digital pounds via pass-through wallets that would send transfer and payment instructions to the core ledger,” the report said.
BANK OF CANADA RELEASES MINUTES FOR FIRST TIME: READ THE FULL TEXT HERE
Yahoo Finance (2023-02-09)
This is an account of the deliberations of the Bank of Canada’s Governing Council leading to the monetary policy decision on January 25, 2023.
POWELL CONFESSES 'THIS TIME IT'S DIFFERENT'
Yahoo Finance (2023-02-08)
"This cycle is different from other cycles...it has just confounded all sorts of attempts to predict," Powell admitted.
MACKLEM REITERATES BOC RATE HIKE PAUSE AS MONETARY POLICY ENTERS NEW PHASE
G&M - Mark Rendell (2023-02-08)
Bank of Canada Governor Tiff Macklem said on Tuesday that he does not expect to continue raising interest rates, reinforcing that the central bank has entered a new phase in its campaign against inflation as sharply higher borrowing costs bring economic growth to a standstill.
BANK OF CANADA TAKES HISTORIC STEP IN IMPROVING TRANSPARENCY WITH RELEASE OF MINUTES
Yahoo Finance (2023-02-08)
On Wednesday, the bank will release minutes of its January meeting at 1:30 p.m. ET (1830 GMT), in which the central bank raised the key interest rate by 25 basis points to 4.5% and said it would likely hold off on further increases for now.
MANY BAY STREET ANALYSTS SEE RATE CUTS LATER THIS YEAR, ACCORDING TO BOC SURVEY
G&M - Mark Rendell (2023-02-07)
Many Bay Street analysts expect the Bank of Canada will cut interest rates later this year as inflation cools and economic growth stalls, according to a survey published for the first time by the bank on Monday.
AS CENTRAL BANKERS TALK TOUGH ON INFLATION, MARKETS PREPARE FOR RATE CUTS
G&M - Sean Kilpatrick (2023-02-05)
While central bankers continue to talk tough about clamping down on inflation, financial markets are questioning how resolute they will be if price pressures ease and economic growth stalls in the coming quarters as expected.
BIDEN AIDE SAYS NEGOTIATION ON DEBT CEILING IS ‘NONSTARTER’
Yahoo Finance - Tony Czuczka (2023-02-05)
A White House economic adviser said negotiations over raising the US debt ceiling are an “absolute nonstarter” for President Joe Biden, though he’s ready to discuss spending with congressional Republicans.
U.S. FEDERAL RESERVE DELIVERS SMALL INTEREST RATE HIKE, SIGNALS A ‘COUPLE’ MORE INCREASES NECESSARY TO TACKLE INFLATION
G&M - Mark Rendell (2023-02-02)
The U.S. Federal Reserve increased its benchmark interest rate by a quarter percentage point on Wednesday and signalled that a “couple” more rate hikes are still needed to bring inflation under control.
‘POWELL WAS DR. JEKYLL AND MR. HYDE’: WHAT THE STREET IS SAYING AS THE FED HIKES KEY INTEREST RATE
G&M - Darcy Keith (2023-02-02)
The U.S. Federal Reserve Wednesday raised its key interest rate by a quarter-point, its eighth hike since March, while signaling that further rate hikes will be required despite signals inflation is easing. But the words spoken in a later press conference seemed to matter just as much, if not more, to markets - which rebounded from earlier losses.
LEBANON DEVALUES, STILL LEAVES POUND FAR AWAY FROM BLACK MARKET
Yahoo Finance - Dana Khraiche (2023-02-01)
Banque du Liban, the nation’s central bank, on Wednesday set the pound at 15,000 per dollar, devaluing the official rate of 1,500 by 90%, according to people familiar with the matter. It also replaced two separate rates offered on foreign-currency deposits — at 8,000 and 12,000 each — with the new level.
CENTRAL BANKS BOUGHT THE MOST GOLD SINCE 1967 LAST YEAR, WGC SAYS
Reuters (2023-01-31)
Central banks added a whopping 1,136 tonnes of gold worth some $70 billion to their stockpiles in 2022, by far the most of any year since 1967, the World Gold Council (WGC) said on Tuesday.
FED SET TO IMPOSE SMALLER HIKE, MAY HINT OF FEWER INCREASES
Investment Executive - Christopher Rugaber (2023-01-31)
When its latest meeting ends Wednesday, the 19-member policymaking committee is expected to raise its key short-term rate, which affects many business and consumer loans, by a quarter-point. In doing so, it would elevate the rate to a range of 4.5% to 4.75%, its highest level in 15 years. The Fed’s move would follow a half-point rate hike in December and four three-quarter point hikes before that.
FEDERAL GOVERNMENT POSTS $3.6 BILLION DEFICIT BETWEEN APRIL AND NOVEMBER
Investment Executive (2023-01-31)
Public debt charges were up $6.1 billion or 36.8%, which the finance department attributes to rising interest rates and elevated inflation.
WHY THE BANK OF CANADA CAN'T CUT RATES THIS YEAR, DESPITE WHAT THE MARKET SAYS
Yahoo Finance - Michelle Zadikian (2023-01-30)
On Wednesday, the Bank lifted its benchmark rate by a quarter point to 4.5 per cent and said it's looking to hold off on further hikes for the time being to assess the impact of higher rates on the economy. It's widely thought that interest rate moves take 12-18 months to fully filter through the economy.
BANK OF CANADA EMERGES AS THE TRENDSETTER ON INTEREST RATES
FP - Kevin Carmichael (2023-01-30)
Jean Boivin, the former Bank of Canada deputy governor, was on a video call organized by the Canadian Association of Business Economics a few hours after the central bank issued its conditional pause on interest rate increases this week.
IT WON’T TAKE MUCH FOR THE ECB TO CRUSH RATE-CUT BETS NEXT WEEK
Bloomberg - Alice Glendhill (2023-01-30)
The stage is set for a clash between traders betting on interest-rate cuts and Christine Lagarde, who’s ready — once again — to hammer home the need to stamp out inflation.
NETHERLANDS AND JAPAN JOIN US IN RESTRICTING CHIP EXPORTS TO CHINA
The Verge - Jon Porter (2023-01-30)
The new restrictions are expected to prevent the sale of “at least some” of these DUV machines, Bloomberg previously noted, which will further limit the ability of Chinese companies to produce advanced chips and set up production lines. ASML CEO Peter Wennink previously told CNBC that China accounted for around 15 percent of the company’s sales in 2022.
BANK OF CANADA DELIVERS QUARTER-POINT RATE HIKE, SIGNALS PAUSE TO FURTHER INCREASES
G&M - Mark Rendell (2023-01-26)
The Bank of Canada increased interest rates again on Wednesday but said that it expects to hold off on further rate hikes, making it the first major central bank to signal an end to monetary policy tightening.
CHRYSTIA FREELAND FINALLY OFFERS PLAN TO HELP BANK OF CANADA COVER ITS LOSSES
FP - Kevin Carmichael (2023-01-26)
“The minister of finance has recently communicated to me that the government intends to introduce legislative amendments that will allow the bank to retain earnings to offset losses,” Macklem said at a press conference in Ottawa. “It will allow, on a temporary basis, the Bank of Canada to retain earnings rather than return them to the government for the purposes of covering losses.”
U.S. INFLATION ROLLER COASTER PROMPTS FRESH LOOK AT LONG-IGNORED MONEY SUPPLY
Yahoo Finance - Michael S. Derby (2023-01-26)
Money-supply purists have long argued that the country's ever-growing stock of money was an inflation powder keg. It's an argument that lost credibility with policymakers in the record-long economic expansion before the pandemic when M2 rose by more than 80% but inflation never rose sustainably above the Fed's 2% target and spent much of that decade notably below it.
MONETARY POLICY REPORT PRESS CONFERENCE OPENING STATEMENT
BOC (2023-01-26)
Two weeks from now, on February 8, we will publish for the first time a more detailed summary of Governing Council’s deliberations. This summary will provide more insight into our decision making, so I can be brief today. But let me say a few words about our economic outlook.
BANK OF CANADA’S WAR ON INFLATION GENERATES UNCERTAINTY AMONG INVESTORS
G&M - Tim Shufelt (2023-01-25)
Nearly a year after the Bank of Canada declared war on inflation, investors have no idea what’s coming next.
BANK OF CANADA TO RELEASE MEETING SUMMARIES FOR FIRST TIME EVER — BUT IS IT ENOUGH TO IMPROVE TRANSPARENCY?
FP - Stephanie Hughes (2023-01-25)
The Bank of Canada is so poor at documenting what goes on when its leaders sit down to discuss interest rates that it gave itself a failing grade among its peers.
Monetary policy is made behind closed doors for obvious reasons. But in the spirit of transparency, most major central banks release minutes of their deliberations a few weeks after the decision is made. The Federal Reserve in the United States goes so far as to publish full meeting transcripts after five years.
Canada’s central bank does nothing of the sort. The governor might share some words about what was discussed in the opening statement at the quarterly press conference that always follows the release of a revised outlook and an interest-rate decision. That covers four of eight scheduled policy announcements. The other four are followed a day later with a speech by the governor or one of his deputies that updates the central bank’s thinking on the economy. The detail of the policy discussion varies from speech to speech.
BANK OF CANADA LIKELY TO RAISE RATES AGAIN WEDNESDAY — BUT SHOULD IT?
CBC - Pete Evans (2023-01-24)
The Bank of Canada is widely expected to raise its trend-setting interest rate this week by a quarter of a percentage point, which would bring it to 4.5 per cent.
UK DEFICIT SOARS TO RECORD AS INFLATION BOOSTS DEBT PAYMENTS
Yahoo Finance - Philip Aldrick, Tom Rees (2023-01-24)
The budget deficit stood at £27.4 billion ($34 billion), a record for the month and almost triple the £10.7 billion shortfall a year earlier, the Office for National Statistics said Tuesday. Economists had forecast a reading of £17.3 billion.
CENTRAL BANKERS SHOULD PRIORITIZE GROWTH OVER THEIR PRIDE
Bloomberg - Marcus Ashworth (2023-01-24)
Stop. Look. Listen. Then proceed cautiously. That was the advice we were given as children for crossing the road, and it’s pertinent today for central bankers. After failing to stop consumer prices from accelerating, the risk now is that their pride is dented and they all overtighten to prove their inflation-fighting mettle — pushing us into a deeper recession. Having misread the the global economy for much of the past three years, they should consider pausing their rate increases to avoid compounding the felony.
FED AND BANK OF CANADA HAVE REASON TO PAUSE HIKES, BMO’S JOYCE SAYS
Bloomberg - Derek Decloet (2023-01-24)
The Federal Reserve and Bank of Canada can afford to pause interest-rate increases now because inflation pressures are easing rapidly, Bank of Montreal strategist Brent Joyce said.
LOONIE TO GAIN AS RATE HIKES CEASE: CIBC
Investment Executive - James Langton (2023-01-24)
“We see a broad weakening trend in the U.S. dollar unfolding this year as attention turns to policy tightening in other advanced economies, and the greenback unwinds some of its safe-haven currency bid to come into better alignment with trade fundamentals,” the report said.
BANK OF CANADA EXPECTED TO DELIVER FINAL QUARTER-POINT RATE HIKE AS INFLATION COOLS
G&M - Mark Rendell (2023-01-23)
The Bank of Canada is widely expected to deliver a final quarter-point interest rate increase on Wednesday before pausing its historic monetary policy tightening cycle.
BANK OF CANADA TO HIKE RATES, LEAVE DOOR OPEN FOR MORE: BMO
Better Dwelling (2023-01-23)
Canadian markets have begun discussing rate cuts, and that’s a reason we might not see one this year. BMO Capital Markets wrote to investors over the weekend, outlining their expectations for a rate hike this week. Their forecast currently sees the Bank of Canada (BoC) hitting pause after the next hike, but they warn it might not be the top. Strong fundamentals, inflationary risks, and market expectations may fuel future hikes.
WHAT THE US DEBT-CEILING BATTLE MEANS FOR YOUR MONEY
Bloomberg - Erik Wasson, Claire Ballentine and Suzanne Woolley (2023-01-22)
Treasury Secretary Janet Yellen has declared that the US has hit its federal debt limit, kicking off an intense political battle that puts the global financial system at risk.
HOW THE BOJ'S NEW YIELD-CONTROLLING TOOL WORKS
Reuters - Leika Kihara (2023-01-20)
The Bank of Japan this week crafted a new weapon to defend its yield cap and extend the lifespan of its yield control policy, without having to ramp up bond buying and dry up already thinning market liquidity.
RATE HIKES HAVE BEGUN TO QUELL U.S. INFLATION: FED’S MESTER
Investment Executive - Christopher Rugaber (2023-01-19)
Mester, who has been president of the Cleveland Fed for eight years, didn’t say how large a rate hike she favored when the Fed’s next meeting ends on Feb. 1. Most economists expect the central bank to announce a smaller quarter-point hike. But Mester noted that the economy and the financial markets “were able to handle” the half-point hike that the Fed carried out in mid-December.
U.S. BANK REGULATOR WEIGHING GIVING MORE INSIGHT INTO ITS SUPERVISORY PROCESS- ACTING HEAD
Reuters (2023-01-18)
The OCC’s escalation framework includes four levels to compel banks to fix issues, starting with a non-public supervisory finding and intensifying to an enforcement action and eventually a growth restriction if the regulator finds that deficiencies have still not been addressed, Hsu said.
BANK OF CANADA APPOINTS NICOLAS VINCENT AS NEW DEPUTY GOVERNOR
Yahoo Finance (2023-01-17)
The Bank of Canada has appointed Nicolas Vincent, an economics professor at HEC Montreal, as a non-executive deputy governor for a two-year term.
BANK OF CANADA NEEDS DEEPER POST-MORTEM OF WHAT WENT WRONG ON INFLATION
FP - Kevin Carmichael (2023-01-17)
The former will be the story of 2023. When asked whether Canada could avoid a recession this year, only one person in a room of about 200 people at the Canadian Club’s annual outlook lunch in Toronto on Jan. 11 raised their hand. Yet investors are starting to wonder if the “soft landing” that central banks promised — without something less than full conviction — might actually be possible. Canadian employers created more than 100,000 jobs in December, and the unemployment rate dropped to five per cent, despite the most aggressive series of interest rate increases in the Bank of Canada’s history. Maybe Macklem knows what he’s doing.
Stopping inflation might be the easier challenge. Humans are poor at both admitting mistakes and opening our minds to information that contradicts our world view. Charles Darwin used to make a point of taking notes on new information that contradicted his understanding of things because “such facts and thoughts were far more apt to escape from memory than favourable ones.” That’s what it took to come up with the theory of evolution. Central bankers must be equally rigorous in their post-mortems of what went wrong during the pandemic. Some of the criticism of their performances is overdone, but it’s obvious they don’t have as good a read on how the economy works as they thought they did.
THE LOOMING U.S. DEBT-LIMIT CRISIS, SUMMED UP IN 5 POINTS
CBC - Alexander Panetta (2023-01-16)
The debt ceiling was last increased two years ago to its current level, $31.4 trillion, or more than 120 per cent of U.S. GDP.
WHY SCOTIABANK'S CHIEF ECONOMIST THINKS THE BANK OF CANADA WON'T BRING INFLATION BACK TO 2%
FP - Bianca Bharti (2023-01-16)
Perrault made the statement during a discussion on inflation at the Canadian Club’s 46th outlook panel, held on Jan. 11 in Toronto. During the event, Perrault was asked if he believed Macklem’s repeated assertion that the central bank will tame price growth, which has remained outside of its target range of one to three per cent since April 2021.
WHY CENTRAL BANKS SHOULD NOT PUSH AHEAD WITH CBDCS
FT - Tony Yates (2023-01-16)
The private sector crypto world might be imploding in flames, but around the world central banks are pushing on with their own digital asset projects. China has rolled out its central bank digital currency (CBDC) to several cities and it was available for use at the Winter Olympics.
BANK OF CANADA MAY LOSE BILLIONS IN COMING YEARS, THINK TANK WARNS
CBC - Nojoud Al Mallees (2023-01-13)
In the fall, the Bank of Canada posted its first loss in its 87-year history, losing $522 million in its third quarter.
CHINA CENTRAL BANK TO MAINTAIN OR INCREASE POLICY-LOAN LIQUIDITY - REUTERS POLL
Yahoo Finance (2023-01-13)
A great majority - 21 traders and analysts - expected the MLF interest rate to stay unchanged at 2.75% this month, while the remaining four respondents expected a small rate cut
JANET YELLEN WARNS US WILL HIT $31.4TN DEBT CEILING NEXT WEEK
FT - James Politi and Lauren Fedor (2023-01-13)
US Treasury secretary Janet Yellen has warned the US will hit its $31.4tn borrowing limit next week and could run the risk of a damaging debt default starting in early June, setting the stage for a high-stakes fiscal negotiation between the White House and Congress in the coming months. In a letter to congressional leaders on Friday, Yellen said the US would reach the debt ceiling set by Congress on January 19, and the Treasury would begin to take “extraordinary measures”, or “special management steps”, in order to honour its payments.
FREELAND APPOINTS THREE NEW BANK OF CANADA BOARD MEMBERS
G&M - Mark Rendell (2023-01-13)
Finance Minister Chrystia Freeland has appointed three new members to the Bank of Canada’s board of directors, including the first Indigenous board member, bringing the central bank’s oversight group back up to full strength.
JAMIE DIMON SAYS FED 'MAY VERY WELL' RAISE INTEREST RATES TO 6%
Yahoo Finance - Alexandra Semenova (2023-01-11)
This time last year, Dimon was among the first voices on Wall Street to predict – correctly – that Federal Reserve officials would deliver as many as six or seven increases to their benchmark policy rate as prices rose at a historic pace. He said the three or four hikes investors were bracing for at the time were a low estimate.
BRITAIN TO PUSH AHEAD WITH READYING GROUND FOR A DIGITAL POUND
Reuters - Huw Jones (2023-01-11)
Getting the design of a digital pound right is a bigger priority than a rapid launch, Britain's Financial Services Minister Andrew Griffith said on Tuesday.
BILL MORNEAU SLAMS LIBERAL GOVERNMENT’S COVID-19 POLICY FOR PUTTING 'POPULARITY CONTEST' OVER FISCAL PRUDENCE
FP - Stephanie Hughes (2023-01-10)
Morneau argues that policymakers put scoring “political points” and public perception over sound fiscal policy with its federal aid programs in his upcoming book to be released Jan. 17. He describes growing tensions between him and Prime Minister Justin Trudeau, calling it one of the worst moments in his political life leading up to his departure in the summer of 2020 amid the WE Charity scandal.
GLOBAL CENTRAL BANKS AREN’T DECLARING VICTORY OVER INFLATION YET
Bloomberg (2023-01-09)
Central banks aren’t giving up their inflation fight yet with the peak in interest rates still to come in most economies, but pauses will come at some point in 2023 — and perhaps even pivots.
WHY OSFI HEAD PETER ROUTLEDGE IS ‘OPTIMISTIC AND WARY AT THE SAME TIME’ HEADING INTO 2023
FP - Interview (2023-01-03)
When I got the job, one of the premises was that the risk environment is shifting, uncertainty is greater, volatility is greater. OSFI has to be ready for risks that we see on the horizon. So, climate risk and digitalization of financial services we do see. And then there are those risks over the horizon that we don’t see that are going to come up. At the time I took the job, it was the pandemic. But in February, we had the first war between sovereign states in Europe since the 1940s. I think it’s fair to say that was beyond the horizon when I took the job.
ITALY AIMS TO CUT RETAILERS' DIGITAL PAYMENT COSTS VIA LEVY ON BANKS, LAWMAKERS SAY
Reuters (2022-12-21)
CANADA’S LATEST INFLATION REPORT DOESN’T PROVIDE THE BANK OF CANADA WITH AN EXIT FROM RATE HIKES
G&M - DAVID PARKINSON (2022-12-21)
The Bank of Canada signalled earlier this month that it’s looking for an exit from its dizzying interest-rate-hiking cycle. Wednesday’s inflation report is not it.
BANK OF JAPAN JOLTS MARKETS IN SURPRISE CHANGE TO YIELD CURVE POLICY
G&M - Leika Kihara (2022-12-20)
The Bank of Japan shocked markets on Tuesday with a surprise tweak to its bond yield control that allows long-term interest rates to rise more, a move aimed at easing some of the costs of prolonged monetary stimulus.
TIFF MACKLEM SAYS HE WON'T SETTLE FOR ANYTHING LESS THAN A RETURN TO 2% INFLATION
FP - Kevin Carmichael (2022-12-20)
The consumer price index was hovering around seven per cent in October, better than 8.1 per cent this summer, but still a long way from home. Getting there could require considerable pain.
BANK OF CANADA GOVERNOR TIFF MACKLEM KNOWS HE HAS SOME EXPLAINING TO DO
G&M - DAVID PARKINSON (2022-12-19)
Canadians have good reason to be upset with Tiff Macklem. Even Tiff Macklem says so.
At the start of the year, the Bank of Canada expected inflation would be close to 2 per cent by the end of 2022. It’s roughly 7 per cent.
“That’s a very big forecast error,” the central bank Governor said in a year-end interview with The Globe and Mail. “So, yes, we have some explaining to do.” Outside the Bank of Canada’s Ottawa headquarters, a snowstorm raged, a fitting metaphor for the kind of year the 61-year-old has had.
When the year began, the bank maintained a record-low policy interest rate of 0.25 per cent, and an explicit pledge to keep it there until the pandemic-battered Canadian economy had returned to full speed. It ends the year with a policy rate of 4.25 per cent, a 15-year high.
In between, Mr. Macklem and his colleagues have raised interest rates seven times, as they race to cool an overheated economy in an effort to tamp down the highest inflation rate in nearly 40 years.
The bank’s chief responsibility is maintaining low and stable inflation. But the inflation rate this year is not just far above where the central bank thought it would be, it’s in a whole different orbit from the bank’s long-standing target of 2 per cent.
As inflation approached and then exceeded 8 per cent over the spring and summer, Mr. Macklem and his team responded with bigger and bigger rate hikes – including an increase of a full percentage point in July, the biggest single step up in almost a quarter-century.
“There’s no question, it’s been intense,” Mr. Macklem said. “And it hasn’t just been intense for me. It’s been intense for everybody at the Bank of Canada. But let’s face it, it’s been intense for every Canadian. Everybody’s lives have been hugely disrupted.”
As first inflation and then rates soared, Canadians have felt the sting of both. Housing values have slumped; mortgage costs have surged. Grocery prices are up 11 per cent year over year. Many households are stretched to their financial limits. The central bank has itself acknowledged that rate increases could tip the economy into recession.
All of this made Mr. Macklem the leading economic newsmaker of the year – and, to hear some people talk, a leading public enemy. Critics at both ends of the political spectrum have questioned Mr. Macklem’s motives and competence. He has faced accusations of acting too slowly on inflation, of irresponsibly fuelling inflation through the bank’s expansion of the money supply, of making workers and households pay the price for his mistakes with a devastating succession of rate increases.
Conservative Party Leader Pierre Poilievre wants him fired. Lana Payne, the president of the largest private-sector union in the country, Unifor, accused him of declaring a class war. Desjardins economist Randall Bartlett lampooned him in a seasonal broadside, “How the Governor Stole Christmas.”
Mr. Macklem isn’t alone. Central bankers around the world have faced a reckoning over how they misread the rise of inflation. And their tough response – one of the most rapid and globally synchronized monetary-policy tightening episodes on record – has drawn howls from investors and politicians alike.
Mr. Macklem used his last speech of 2022 – an event last week in Vancouver – to deliver something of a mea culpa to Canadians. As in that speech, his conversation with The Globe a few days later candidly discussed the bank’s policy stumbles and the reasons behind them, and acknowledged the pain that the aggressive rate policy is inflicting as the bank tries to get the inflation genie back in the bottle – while looking toward what he believes are brighter days ahead.
“Canadians are being harmed by inflation, they’re feeling the pain. They’re also feeling the strain of rapid increases in interest rates. They’re asking a lot of tough questions; their elected representatives are asking a lot of tough questions. I understand that,” he said. “They should be asking tough questions. They should expect a lot from their central bank.”
EUROPEAN CENTRAL BANK BARS POLICY-MAKERS FROM SPECULATING AFTER BACKLASH, FED SCANDALS
G&M (2022-12-19)
The European Central Bank has banned its top officials from picking stocks and bonds or making short-term trades after a string of scandals at the Federal Reserve and backlash at home.
U.S. FEDERAL RESERVE FORESEES ANOTHER YEAR OF RISING INTEREST RATES FOR 2023
CBC - Don Pittis (2022-12-15)
Canadian borrowers hoping that the U.S. central bank would signal that rate hikes were over were once again disappointed after the Federal Reserve chair Jerome Powell not only hiked rates by a half a point to a 15-year high but promised more increases in the new year.
ECB IS DOUBLING DOWN ON RATE HIKES JUST AS A RECESSION BITES
Yahoo Finance - Craig Stirling, Jana Randow and Alexander Weber (2022-12-15)
With inflation in double digits and projected by officials to stay above their 2% goal for years to come, this week’s meeting both rounded off six months of drastic action and set the tone for further forceful monetary tightening.
BANK OF CANADA DEPUTY SIGNALS END IS NEAR ON RATE HIKES, AS CENTRAL BANK BECOMES ‘DATA DEPENDENT’
G&M - Mark Rendell (2022-12-09)
The Bank of Canada could pause interest rate hikes as early as next month as it shifts to a more “data-dependent” approach to monetary policy, although the bank is still prepared to be “forceful” if necessary, deputy governor Sharon Kozicki said on Thursday.
CHINA TO SELL 750 BILLION YUAN IN BONDS TO BOOST ECONOMY
Bloomberg (2022-12-09)
“If these means additional funds, it suggests a highly proactive economic policy for 2023 - confirming the stance alluded to at the Politburo conference,” said Becky Liu, head of China macro strategy at Standard Chartered Bank. “Just the size and dates are making it very confusing — the maturing special bond is widely expected to be rolled over.”
BIG BANKS RAISE PRIME RATE TO 6.45% FOLLOWING BANK OF CANADA HIKE
FP (2022-12-09)
Royal Bank of Canada, TD Canada Trust, Scotiabank, CIBC, Bank of Montreal, National Bank of Canada, Equitable Bank and Laurentian Bank of Canada all raised their prime rate by 50 basis points from 5.95 per cent to 6.45 per cent starting Thursday, Dec. 8.
BANK OF CANADA DELIVERS HALF-POINT RATE HIKE, SIGNALS END OF AGGRESSIVE CAMPAIGN MAY BE NEAR
G&M - Mark Rendell (2022-12-08)
The Bank of Canada increased interest rates for the seventh consecutive time on Wednesday, surprising markets with another oversized move while signaling that it may be nearing the end of its historic rate-hike cycle.
TRUMP ORGANIZATION FOUND GUILTY OF TAX FRAUD SCHEME
Reuters - Luc Cohen, Karen Freifeld (2022-12-07)
Donald Trump's real estate company was convicted on Tuesday of carrying out a 15-year-long criminal scheme to defraud tax authorities, adding to the legal woes facing the former U.S. president as he campaigns for the office again in 2024.
The Trump Organization - which operates hotels, golf courses, and other real estate around the world - was found guilty of paying personal expenses for top executives including former chief financial officer Allen Weisselberg, and issuing bonus checks to them as if they were independent contractors.
YES, THE BANK OF CANADA HAS WAGED A ‘CLASS WAR’ – BUT NOT THE ONE YOU THINK
G&M - John Rapley (2022-12-05)
Central bankers must be feeling punch-drunk. For years, they strode like superheroes. We praised their genius, bestowed them with titles such as “maestro” – as one journalist labelled Alan Greenspan in a now-infamous encomium – and revelled in the New Jerusalem to which they’d delivered us: a Promised Land of low inflation and endless credit, where all we had to do to get rich was buy a house and watch it grow.
CANADA 'WATCHING CLOSELY' AS BIDEN PRESSED TO FIX INFLATION REDUCTION ACT 'GLITCHES'
Yahoo Finance (2022-12-05)
"It's something we're watching closely and we're engaged with our European counterparts, as well as our American counterparts, to make sure that we're working together," Trudeau told a news conference Monday.
THE BANK OF CANADA’S INDEPENDENCE TAKES ANOTHER HIT
G&M - Konrad Kabasuki (2022-12-02)
Bank of Canada Governor Tiff Macklem is back in the hot seat after the central bank this week announced a $522-million third-quarter loss, the first such red ink in the institution’s nearly nine-decade history. More losses are expected in the coming months, creating an awkward situation for the federal government and raising inevitable questions about the bank’s independence.
GLOBAL CENTRAL BANKS BRACE FOR ‘GREENFLATION’ AND CLIMATE CHANGE
Yahoo Finance - Siegfrid Alegado and Anup Roy (2022-12-02)
The shift to green energy may be “inflationary and even slightly stagflationary,” Bank of France Governor Francois Villeroy de Galhau said Friday, speaking virtually on a panel at a central bank conference in Bangkok. “I stress might, we don’t know yet.”
BANK OF CANADA COULD DELIVER ANOTHER HALF-POINT HIKE NEXT WEEK
FP - Larysa Harapyn (2022-12-02)
Brett House, fellow at Public Policy Forum, talks with Financial Post’s Larysa Harapyn about what the latest GDP reading on Canada’s economy means to the Bank of Canada which will decide on interest rates on Dec. 7.
BANK OF CANADA HAS ROOM TO STOP HIKING BEFORE FED, SURVEY SHOWS
Bloomberg (2022-12-02)
The Bank of Canada has leeway to end its interest-rate hiking cycle in coming months even if the Federal Reserve keeps pushing borrowing costs higher next year, according to economists.
U.S. FEDERAL RESERVE TO KEEP RATES HIGHER FOR LONGER TO COMBAT INFLATION, POWELL SAYS
G&M - Christopher Rugaber (2022-11-30)
The Federal Reserve will push rates higher than previously expected and keep them there for an extended period, Chair Jerome Powell said Wednesday, in remarks likely intended to underscore the Fed’s single-minded focus on combating stubborn inflation.
WHERE IS THE GOVERNMENT’S PROMISED COUNCIL OF ECONOMIC ADVISORS? WE SURE COULD USE IT
G&M - DAVID PARKINSON (2022-11-29)
Last April, when the Trudeau government tabled a budget amid some of the most difficult economic questions in decades, it said it was going to seek help finding answers.
INTEREST RATES NEED TO KEEP RISING TO FIGHT INFLATION, TIFF MACKLEM TELLS MPS
G&M - Mark Rendell (2022-11-24)
Parliamentarians questioned Bank of Canada Governor Tiff Macklem about inflation and historic financial losses at the central bank on Wednesday, with top opposition politicians looking to frame the bank’s continuing dilemmas to their political advantage.
FED MINUTES SHOW 'SUBSTANTIAL MAJORITY' SUPPORT SLOWING PACE OF RATE HIKES
Yahoo Finance - Jennifer Schonberger (2022-11-24)
A “substantial majority” of Fed officials believe it will soon be time to slow down the central bank's current pace of rate hikes.
THE PROBLEM OF THE BANK OF CANADA’S BALLOONING BALANCE SHEET
Yahoo Finance - STEVE AMBLER AND JEREMY KRONICK (2022-11-24)
The Bank of Canada’s ballooning balance sheet has received lots of attention lately. From $120 billion in early March 2020 it grew over the next 12 months to $575 billion and it still stands at $414 billion today, more than three times what it was. That happened because in response to the pandemic the Bank purchased Government of Canada bonds from commercial banks. It added the bonds to the asset side of its balance sheet and paid for them by boosting “settlement balances” — basically, the commercial banks’ bank accounts with it — on the liability side. Voilà, a ballooned balance sheet.
BANK OF CANADA BETTING HIGH JOB VACANCIES WILL CUSHION RISE IN UNEMPLOYMENT
G&M - Mark Rendell (2022-11-21)
As the Bank of Canada squeezes the economy with higher interest rates, central-bank economists are betting that unemployment won’t spike as much as in previous downturns because of the elevated level of job vacancies across the country.
CARLYLE SAYS WORST OF YEN LOSSES OVER WITH PEAK DOLLAR
Yahoo Finance - Chikako Mogi and Takako Taniguchi (2022-11-18)
A 50 basis-point hike in December accompanied by hawkish rhetoric may end up pushing the yen past its three-decade low of 151.95 against the dollar. After that, the Japanese currency is more likely to strengthen, based on his views for the Fed, Thomas said.
EURO ZONE BANKS TO REPAY 296 BLN EUROS IN ECB LOANS
Reuters (2022-11-18)
This is less than the roughly 500 billion euros many analysts expected for the first voluntary repayment window of the ECB's Targeted Longer Term Refinancing Operation (TLTRO) since terms were changed last month.
BANKS NEED TO WORRY ABOUT SHADOW BANKS
Bloomberg - PAUL J. DAVIES (2022-11-17)
What do Bill Hwang, the disgraced US investor, and Liz Truss, Britain’s shortest-serving prime minister, have in common? They were behind two of the multiple mini-crises in recent years that have gotten investors, bankers and regulators sweating about systemic risks for financial markets and investment funds. What people aren’t talking about enough, however, is the knock-on effect for banks.
EUROPEAN CENTRAL BANK POLICY-MAKERS CAUTION AGAINST RAISING INTEREST RATES TOO FAST
G&M (2022-11-15)
The European Central Bank needs to keep raising interest rates but must not move too fast to avoid unnecessarily exacerbating a downturn, two policy-makers said on Monday, with one of them making the case for slowing the pace of policy tightening soon.
BANK OF CANADA GOVERNOR MACKLEM HAS 'DECLARED CLASS WAR ON WORKING PEOPLE': UNIFOR PRESIDENT SOCIAL SHARING
CBC - Peter Zimonjic, Catherine Cullen (2022-11-15)
"Rather than developing a tailored response intended to slow profits, stop profiteering, fix supply chain bottlenecks and help workers keep up, policy makers have taken to blaming workers instead — including the governor of the Bank of Canada, who has basically declared class war on working people in this country," said Unifor president Lana Payne.
EUROPE’S SOVEREIGN DEBT CAN’T KEEP GOING UP FOREVER
Bloomberg (2022-11-15)
Time and again, Europe’s leaders have pledged to address a looming threat to their union: excessive government debt. Yet time and again, events — first the pandemic, now a war-related energy shock — have undermined their plans, making the problem larger.
INVESTING PERSONAL FINANCE EDITORS' PICK FED CHAIR JEROME POWELL—HAUNTED BY THE GHOST OF PAUL VOLCKER—COULD TANK THE ECONOMY
Forbes - Jonathan Ponciano (2022-11-14)
Some months after Jerome Powell became Federal Reserve Chair in early 2018, the former attorney and longtime investment banker began carrying around a new memoir by Paul Volcker: Keeping At It: The Quest for Sound Money and Good Government. “I actually thought I should buy 500 copies of his book and just hand them out at the Fed," Powell quipped at a conference in October 2019, just two months before Volcker passed away at 92. "I didn’t do that, but it’s a book I strongly recommend, and we can all hope to live up to some part of who he is."
It was a gracious, but arguably consequence-free tribute by Powell. After all, inflation was then running at just 2% and the towering (6’7”), cigar-puffing Volcker was most famous for taming the stubbornly high inflation that plagued the United States in the 1970s and early 1980s—and driving the economy into a painful double-dip recession while doing it. No need to emulate that. But now Powell is facing the sharpest inflation spike in 40 years and some critics worry he may be hewing too closely to an outdated Volcker playbook, tightening too-fast and too long and spurring a deeper-than-needed recession at home and abroad. Repeatedly this year, Powell has alluded to the title of Volcker's memoir when discussing the duration of interest rate hikes, pledging the Fed must "keep at it" until inflation slows. He has insisted the stop-and-start Fed policy, led by Volcker predecessor Arthur Burns in the 1970s, was a mistake because it bred stagflation—that is, prolonged inflation in addition to stagnant growth—making it even more difficult to tame skyrocketing prices. On Wednesday, Fed officials hiked interest rates by 75 basis points for a fourth-straight time in six months, pushing the key federal-funds rate (that’s the rate at which banks lend to each other, not to consumers or businesses) to a target range of 3.75% to 4%—the highest level since the Great Recession. In their formal announcement, officials hinted they may slow the pace of hikes in December, saying they will take into account "the lags with which monetary policy affects economic activity" in determining future increases. But Powell, in the press conference that followed, didn’t back away from his hawkish stance, saying the latest economic data suggests the Fed may ultimately move rates to higher levels than it projected in September and that the risk is doing too little rate-hiking, not too much."We want to get this exactly right, but if we over-tighten, then we have the ability with our tools to support economic activity strongly," Powell said. "On the other hand, if you make a mistake in the other direction, and you let this [inflation] drag on a year or two, the risk is that it becomes entrenched in people's thinking." That’s what happened in the 1970s and early 1980s, as expectations of high inflation became entrenched and workers (many more of them unionized back then) demanded higher raises to cover future inflation.
THE BANK OF CANADA IS WARNING CANADIANS TO BRACE FOR A ROUGH WINTER
CBC - Peter Armstrong (2022-11-13)
For years now, central banks around the world have helped consumers and businesses weather economic storms. In crisis after crisis, they cut interest rates to help people get through. They printed money and bought bonds to prop up markets.
BANK OF CANADA RATE FORECAST GETS YET ANOTHER UPWARD REVISION AT BMO
Better Dwelling (2022-11-10)
The Bank of Canada (BoC) surprised many with its rate hike earlier this month. Despite the market pricing in 75 basis points (bps), the central bank went with a 50 bps move. At 3.75%, the policy rate is now the highest in over a decade, and many assumed a smaller hike indicated we were close to peak. Not exactly.
BOE’S FORECASTS UNDER FIRE FROM FORMER UK RATE SETTERS
Yahoo Finance - Philip Aldrick (2022-11-10)
John Vickers, a former chief economist who joined the central bank in 1998, will say in his Beesley lecture in London on Wednesday night that the central bank has fallen short and must be bolder to bring inflation back to the 2% target.
HOW IS IT PRUDENCE WHEN FREELAND SPENDS $20 BILLION OVER BUDGET?
FP - Franco Terrazzano (2022-11-10)
The federal government is on track to blow the spending target it set in April by $20 billion. That’s astonishing when we’re just a little more than halfway through the budget year. But here’s the most amazing part: Finance Minister Chrystia Freeland called her fiscal update “prudent.”
LIBERALS WORKING ON POLICIES TO ENSURE CARBON TAX REMAINS IN PLACE FOR YEARS TO COME
FP - Gabriel Friedman (2022-11-09)
The idea that releasing greenhouse gases into the atmosphere should cost money — known as carbon pricing — sits at the center of the federal Liberals’ plan to limit climate change, and now they’re working on policies to ensure that it remains in place in Canada for years to come.
Last month, Jonathan Wilkinson, minister of natural resources, told a crowd in downtown Toronto, that the federal Liberals plan to introduce a policy to ensure carbon pricing not only remains in place through at least 2030, but also ramps up during that time, from $50 per tonne to $170 per tonne.
THE RETURN OF RED CHINA
Foreign Affairs - Kevin Rudd (2022-11-09)
In 1978, Chinese leader Deng Xiaoping announced that his country would make a break with the past. After decades of political purges, economic autarky, and suffocating social control under Mao Zedong, Deng began stabilizing Chinese politics, removing bans on private enterprise and foreign investment and giving individuals greater freedom in their daily lives. This switch, termed “reform and opening,” led to pragmatic policies that improved Beijing’s relations with the West and lifted hundreds of millions of Chinese people from poverty. Although China remained authoritarian, Deng shared power with other senior party leaders—unlike Mao. And when Deng left office, his successors continued down much the same path.
DON'T PICK ON THE PRAIRIES
FP - Diane Francis (2022-11-08)
A newly announced Saskatchewan first act and the proposed Alberta sovereignty act aim to profoundly reshape this country by finally taking a stand against the federal government’s propensity to control areas of provincial jurisdiction.
On Nov. 1, Saskatchewan Premier Scott Moe tabled Bill 88, which will assert provincial control over energy development, exploration and the production of electricity within the province. The legislation also seeks to unilaterally amend the Saskatchewan Act and the Canadian Constitution, to say that natural resource development is “critical to the future well-being and prosperity of Saskatchewan and its people.”
SPEECH BY TIFF MACKLEM, GOVERNOR OF THE BANK OF CANADA
OSFI - Tiff Macklem (2022-11-07)
The Evolution of Canadian Labour Markets
BANK OF ENGLAND ANNOUNCES BIGGEST RATE HIKE IN 30 YEARS
CBC (2022-11-04)
The central bank boosted its key rate by three-quarters of a percentage point, to three per cent, after consumer price inflation returned to a 40-year high in September. The aggressive move comes even as the bank predicted a two-year economic contraction through June 2024, which would be the longest recession since at least 1955, according to the Office for National Statistics.
TRUDEAU VOWS 2% TAX ON BUYBACKS, BOOSTS CLEAN-TECH CREDITS
Yahoo Finance - Randy Thanthong-Knight and Geoffrey Morgan (2022-11-04)
The buyback tax will be imposed on the net value of all types of share repurchases by public corporations in Canada. It is double the size of the 1% excise tax on repurchases that was signed into law by US President Joe Biden as part of the Inflation Reduction Act unveiled in August.
FED PULLS THE OLD BAIT AND SWITCH AND INVESTORS ARE LEFT KICKING AIR
FP - David Rosenberg (2022-11-04)
Back then, Powell intimated that an inversion would signal the need for the Fed to begin thinking of easing policy. The spread between three-month rates and the 18-month forward expectation of the three-month rate touched two basis points in recent days, and is well off the nearby highs of 130 basis points, and the best the chair could say was “it’s not inverted.”
BOC’S MACKLEM SAYS INTEREST RATE HIKES ARE NEARING AN END, BUT TO EXPECT BORROWING COSTS TO RISE BEFORE LEVELLING OUT
G&M - Mark Rendell (2022-11-03)
The Bank of Canada is approaching the end of its rate hike campaign, but Canadians should expect borrowing costs to rise further before the pause, the central bank’s governor, Tiff Macklem, said Tuesday evening. Inflation remains far too high, Mr. Macklem told the Senate committee on banking, commerce and the economy. At the same time, the Canadian economy is expected to “stall” in the coming quarters, he said. This puts the central bank in a precarious spot. “If we don’t do enough, Canadians will continue to endure the hardship of high inflation. And they will come to expect persistently high inflation, which will require much higher interest rates and, potentially, a severe recession to control inflation,” Mr. Macklem told the Senate committee. He was there to explain the bank’s latest interest rate hike, announced last week. “If we do too much, we could slow the economy more than needed. And we know that has harmful consequences for people’s ability to service their debts, for their jobs and for their businesses.” The central bank raised its benchmark interest rate by another 50 basis points last Wednesday. (There are 100 basis points in a percentage point.) The move was smaller than financial markets had expected, but still brought the policy rate to 3.75 per cent – the highest level since early 2008. Mr. Macklem and his team have now raised rates six times since March, one of the fastest rate-hike cycles in decades. The crucial question is how much further the bank intends to go. Financial markets expect the bank to announce additional 25-basis-point increases in December and January, bringing the policy rate to a resting place of 4.25 per cent. Mr. Macklem shrugged off a question from Senator Pierrette Ringuette about an end point for interest rate hikes. “It’s pretty clear we think it needs to go up, but we do think we’re getting closer to the end,” he said. “That gives you a broad indication there. Yes, there’s a bit of space within that. As we get closer, as we get more information, we’ll make those decisions in real time.” The Bank of Canada isn’t alone in increasing borrowing costs. Central banks around the world are rapidly raising interest rates, in one of the most comprehensive global monetary policy tightening episodes on record. The U.S. Federal Reserve, the world’s largest and most important central bank, is expected to announce another 75-basis-point rate hike on Wednesday. Higher interest rates make it more expensive to borrow money. The goal of the increases is to reduce how much consumers want to buy, and how many workers businesses want to hire, which would in turn slow the pace of price and wage growth. In other words, the Bank of Canada is intentionally slowing down the economy in an effort to restore price stability. Rate hikes are already squeezing the Canadian housing market, with house prices down around 10 per cent from the peak earlier this year. Spending on other big-ticket items, such as furniture and appliances, is also trailing off. The outlook for the broader economy has darkened. The bank’s latest economic forecasts, published last week, show near-zero economic growth in the next three quarters. It now thinks there is a roughly 50-50 chance that Canada will experience several quarters of negative growth – a common definition of a recession. That will mean a rise in unemployment. “We are aware that this will tend to affect the most vulnerable workers the most. It will be a difficult transition for some. But there’s not really an alternative,” Mr. Macklem said. “We need a period of low growth … We’ve got to get the labour market into better balance.” The inflation picture is mixed. The rate of annual consumer price index inflation has trended down in recent months, thanks largely to falling gasoline prices. CPI inflation was 6.9 per cent in September, compared to a four-decade high of 8.1 per cent in June. The bank’s target is 2 per cent. At the same time, a growing number of goods and services are experiencing oversized price increases, making inflation harder to avoid. Two-thirds of the components of the consumer price index experienced annual price jumps of more than 5 per cent in September. Canadians are being hit particularly hard at the grocery store, where food prices rose 11.4 per cent year-over-year in September – the biggest jump since 1981.
U.S. RAISES INTEREST RATE AGAIN BUT HINTS THAT HIKING POLICY MAY SOON PIVOT
CBC - Pete Evans (2022-11-03)
That's the bank's way of saying that after having raised its rate five times in barely six months, it is getting closer to leaving the policy rate where it is while it assesses the impact of its increases so far.
AGGRESSIVE BANK OF CANADA RATE HIKES COULD ADD MORE STRAIN ON OTTAWA’S DEBT SERVICING
FP - Stephanie Hughes (2022-11-03)
“I think (rising debt costs and recession risks) go hand-in-hand really, to be honest,” Bartlett said. “It’s really just a function of an economic downturn — revenue growth slows, expense growth rises as a result of that. Then you layer on the gradual effects of higher inflation feeding into higher spending, plus higher interest rates which are leading to the economic downturn. So, it’s a bit of a perfect storm for a weaker fiscal forecast.”
BOC’S MACKLEM SAYS INTEREST RATE HIKES ARE NEARING AN END, BUT TO EXPECT BORROWING COSTS TO RISE BEFORE LEVELLING OUT
G&M - Mark Rendell (2022-11-02)
The Bank of Canada is approaching the end of its rate hike campaign, but Canadians should expect borrowing costs to rise further before the pause, the central bank’s governor, Tiff Macklem, said Tuesday evening.
HOW THE FEDERAL RESERVE MAKES (AND LOSES) MONEY
Yahoo Finance (2022-11-02)
Normally the Federal Reserve makes a profit from its balance sheet, but with higher interest rates it is now in the red. WSJ explains how the Federal Reserve makes money, what it does with it, and what happens now.
FED SET TO RAISE RATES BY 75 BASIS POINTS ONCE AGAIN, POWELL TO TALK HIKE PATH
Yahoo Finance - Jennifer Schonberger (2022-11-02)
That level of rate hike would bring the central bank’s policy rate, the federal funds rate, to a new range of 3.75% to 4% — its highest level since the end of 2007— from a current range between 3% and 3.25%.
AMID GROWING CRITICISM, MACKLEM SAYS BANK OF CANADA'S INDEPENDENCE ISN'T UNDER THREAT
CBC - Nojoud Al Mallees (2022-10-31)
"I do not have any concerns about the bank's independence being under threat," Macklem said in an interview with The Canadian Press on Wednesday.
BAD S&P EARNINGS PLAYING INTO FED HANDS
Bloomberg - Vildana Hajric and Katherine Greifeld (2022-10-31)
Was it good or bad this week when Alphabet Inc. told investors that advertising demand that helped swell its top line 50% in two years is starting to soften? Depends on what you mean by bad, and rarely has an argument over definitions meant more for markets and the economy.
JAPAN SPENT RECORD $42 BILLION IN OCTOBER TO PROP UP YEN
Bloomberg - Yoshiaki Nohara and Emi Urabe (2022-10-31)
Japan spent a record 6.3 trillion yen ($42.4 billion) in October to counter the yen’s sharp slide against the dollar, as it tried to limit speculative moves adding to pressure on the currency.
BANK OF CANADA SHOULD RELEASE THE INFLATION INDEX DATA IT’S USING: BMO
Better Dwelling (2022-10-31)
Canada’s oldest bank would like a little more clarity from the country’s central bank, going forward. BMO Economics wrote to investors this week, arguing the Bank of Canada (BoC) needs to be more transparent about their inflation data. After delivering a smaller-than-expected rate hike, the BoC presented a chart to justify its move. The data presented isn’t a regular measure used by markets, and BMO had trouble recreating it. In the future, BMO is requesting more regular releases of this non-traditional measure, since it has a significant impact on the market.
AS CANADA FACES POTENTIAL RECESSION, FREELAND TO GIVE FALL ECONOMIC STATEMENT NOV. 3
Investment Executive - Nojoud Al Mallees, Canadian Press, Mia Rabson (2022-10-31)
“We can’t support every single Canadian in the way we did with the emergency measures that we put in place at the height of the pandemic,” she said Oct. 19 in a speech to the Automotive Parts Manufacturers’ Association in Windsor, Ont.
WE NEED TO TALK ABOUT THE UNCO-ORDINATED, SIMULTANEOUS RATE HIKES BY CENTRAL BANKS AROUND THE WORLD
G&M - Todd Hirsch (2022-10-28)
It seemed inevitable. The fifty basis point rate hike today by the Bank of Canada might have surprised those who expected a larger increase. Still, it has a lot of people perplexed. Some are even angry.
BANK OF CANADA SWERVES IN 'GAME OF CHICKEN' WITH INFLATION: WHAT ECONOMISTS SAY
FP - Stephanie Huges (2022-10-27)
The Bank acknowledged that while inflation is off its peak, it still remains too high. In the accompanying monetary policy report, the central bank is now expecting inflation to cool to three per cent in late 2023 before returning to the two per cent target by 2024.
ECB TO RAISE INTEREST RATES, LIKELY TO TRIM BANK SUBSIDIES
Reuters - Balaz Koranyi, Francesco Canepa (2022-10-27)
The European Central Bank will raise interest rates again on Thursday and likely reel in a key subsidy to commercial banks, taking another big step in tightening policy to fight off a historic surge in inflation.
BANK OF CANADA EXPECTED TO ANNOUNCE ANOTHER SIZEABLE RATE HIKE TODAY
Yahoo Finance (2022-10-26)
Today's rate hike would make it the sixth consecutive time the bank raises interest rates, making it the fastest monetary policy tightening in its history.
MONETARY POLICY REPORT PRESS CONFERENCE OPENING STATEMENT
BOC - Tiff Macklem (2022-10-26)
Today, we raised the policy interest rate by 50 basis points to 3.75%. This is the sixth consecutive increase since March. Quantitative tightening continues and is complementing increases in the policy rate. We also expect our policy rate will need to rise further. How much further will depend on how monetary policy is working to slow demand, how supply challenges are resolving and how inflation and inflation expectations are responding to this tightening cycle.
FROM LEFT AND RIGHT, POLITICAL BACKLASH TO BANK OF CANADA GROWS
G&M - Mark Rendell (2022-10-25)
The New Democratic Party is criticizing the Bank of Canada’s rapid interest rate increases, further complicating the political environment for the central bank as it attempts to get inflation under control.
BANK OF CANADA EXPECTED TO DELIVER ANOTHER LARGE RATE HIKE AS IT CONTINUES INFLATION FIGHT
G&M - Mark Rendell (2022-10-24)
The Bank of Canada is expected to deliver another large interest rate increase this week, as central bank officials remain more concerned about doing too little to combat inflation than doing too much and causing a recession.
'FREELAND DOCTRINE' COULD SET THE WORLD ON A PATH TO A NEW TRADE COLD WAR
CBC - Don Pittis (2022-10-24)
In a speech to the Brookings Institution on Oct. 11 that is still making waves around the world, called variously — though not by her — a "manifesto" or the "Freeland Doctrine," the deputy PM and finance minister laid out groundwork for a new global trade regime.
NEW U.K. LEADER TO FACE HIGHEST GOVERNMENT DEBT IN 60 YEARS
Investment Executive - Danica Kirka (2022-10-24)
Public borrowing rose to 98% of economic output in September as rampant inflation increased interest payments on what the government owed, the Office for National Statistics said Friday. That’s higher than at any point since 1963, when Britain was still paying off debts accumulated during World War II.
PRESS CONFERENCE: MONETARY POLICY REPORT – OCTOBER 2022
BOC - BOC (2022-10-24)
Tune in October 26th, 11 AM, via above link for press conference coverage.
OSFI’S ANNUAL RISK OUTLOOK – FISCAL YEAR 2022-23
OSFI (2022-10-24)
This document provides an update to OSFI’s 2022-2023 ARO to include these environmental factors and OSFI’s Regulatory and Supervisory responses. The annex also notes modifications to policy releases.
MARK CARNEY SAYS FISCAL DISCIPLINE 'IMPERATIVE' TO COMBAT GLOBAL INFLATION, INSTABILITY
FP - Stephanie Hughes (2022-10-21)
“In an environment where we have left the world of low-for-long interest rates (and) low volatility, in an environment where borrowing costs are going to be higher — in my judgment, higher not just in the short-term, but in the medium-term — fiscal discipline is imperative,” Carney said during testimony at the Senate banking committee on Oct. 20.
Carney said Canadian governments should take heed. He said targeted aid to households most affected by inflation was justifiable, but that otherwise it’s time to reduce deficits. With the benefit of hindsight, Carney also made the point that federal fiscal supports that were necessary through much of the pandemic went on longer than warranted.
LEBANON APPROVES SOME BANKING LAW CHANGES DEMANDED BY IMF
Yahoo Finance (2022-10-19)
“We agreed on a law to lift banking secrecy with some amendments where we widely expanded the number of groups that can ask to lift banking secrecy,” the head of parliament's finance and budget committee, Ibrahim Kanaan, said in a tweet. “Negotiations with the International Monetary Fund have not stopped, and we have been in constant communication in the past days and hours so there won't be flaws in the agreement that Lebanon aspires to.”
HOW HIGH COULD INTEREST RATES GO?
FP - Stephanie Hughes (2022-10-19)
Many economists put the terminal rate, or the likely rate the Bank will max out at before cutting, at four or 4.25 per cent. The Bank of Canada’s Oct. 17 business outlook survey and its accompanying survey of consumer expectations found that both businesses and consumers are expecting short-term inflation to persist and a recession to be around the corner. Despite the gloom, many economists maintained their calls for a four-per-cent peak in interest rate hikes, arguing that the findings could have been much worse.
WESTERN COUNTRIES ALREADY EMBRACING ‘FRIEND-SHORING’ TO REDUCE TRADE WITH AUTHORITARIAN REGIMES, FREELAND SAYS
G&M - Steven Chase (2022-10-18)
Deputy Prime Minister Chrystia Freeland says leading Western countries are setting an example by embracing “friend-shoring,” or shifting trade to friendly partners and liked-minded democracies: an approach that would curb some commercial relations with countries such as Russia and China.
BRITISH PM TRUSS APOLOGISES FOR ECONOMIC PLAN, SPENDING CUTS TO COME
Reuters - Sachin Ravikumar (2022-10-18)
Prime Minister Liz Truss apologised for threatening Britain's economic stability after she was forced to scrap her vast tax-cutting plans and embark on a programme of "eye-watering" public spending cuts instead.
FRANCE’S CENTRAL BANK BOSS SAYS UK CRISIS SHOWS RISK OF ‘VICIOUS LOOP’
FT - Martin Arnold (2022-10-18)
France’s central bank head has warned that the recent turmoil in the UK’s bond markets illustrates the “vicious loop” governments face if they undermine efforts by rate-setters to curb soaring inflation.
ALL THE EMPEROR’S MEN: HOW XI JINPING BECAME CHINA’S UNRIVALLED LEADER
FT (2022-10-18)
Politics is personnel, especially in China’s Communist party system.
CHIEF ACTUARY OF THE GOVERNMENT OF CANADA UNVEILS EXTERNAL PEER REVIEW PANEL FOR 31ST ACTUARIAL REPORT ON THE CANADA PENSION PLAN
OSFI (2022-10-17)
The panel members include Mr. Stephen Butterfield, Mr. Michel St-Germain and Ms. Jill Wagman. They are all Fellows of the Canadian Institute of Actuaries (CIA) and Fellows of the Society of Actuaries (SOA). Each panel member has extensive experience in risk management, governance, funding, and design of pension plans.
TIFF MACKLEM ON WHY CANADIANS SHOULD TRUST HIM TO BRING DOWN INFLATION
CBC - Video (2022-10-12)
The Governor of the Bank of Canada is dedicated to cooling off inflation. He's raised interest rates at a faster clip than other G7 countries, and there are signs it may be starting to work. But could the tactic also tip us into a recession? Paul Haavardsrud asks Tiff Macklem if there's still a chance to steer the Good Ship Economy in for a soft landing.
THE FED’S INTEREST RATE HIKE JUST MADE THE BANK OF CANADA’S JOB FIGHTING INFLATION HARDER
G&M - DAVID PARKINSON (2022-10-11)
The Federal Reserve has just given the Bank of Canada an awful lot to think about.
On Wednesday, the U.S. central bank did a lot more than raise its policy interest rate by another three-quarters of a percentage point, to a range of 3 per cent to 3.25 per cent, a 14-year high. It raised the stakes in the global battle against inflation. It set the bar much higher for the peak of interest rates. It placed the world’s biggest economy on the edge of recession as it pursues this steeper rate path.
Now Canada’s central bank – facing different conditions than the Fed, but in pursuit of the same inflation-vanquishing goal – will have to decide what the strikingly altered picture painted by its U.S. counterpart means for Canadian monetary policy. In trying to strike the right balance in interest rates that will put inflation back in its cage without derailing the Canadian economy, the Bank of Canada now must consider how the Fed’s new stance changes that balance – and how much it can afford to diverge its own policy from that of its huge neighbour.
The members of the Federal Open Market Committee – the body that sets rates – projected that the benchmark rate will need to rise by at least another full percentage point by the end of this year, and will likely peak at somewhere between 4.5 per cent and 5 per cent next year. That’s nearly one percentage point higher than the Fed was talking about in the summer – a striking leap in expectations in the space of a couple of months.
The FOMC members also slashed their forecast for U.S. economic growth to a puny 0.2 per cent this year and 1.2 per cent next year, down from July’s projection of 1.7 per cent in both years. Such an anemic growth pace suggests a U.S. economy one sneeze away from full-on contraction. The committee sees unemployment rising next year to mildly above the estimated long-term normal level.
It all implies that the Fed is braced to put the U.S. economy into a stall, teetering on the precipice of recession, in order to tame inflation – a stance that Fed chair Jerome Powell confirmed Wednesday.
“No one knows whether this process will lead to a recession, or if so, how significant that recession would be,” Mr. Powell said in his post-announcement news conference.
“The chances of a soft landing are likely to diminish to the extent that [interest rate] policy needs to be more restrictive, or restrictive for longer. Nonetheless, we’re committed to getting inflation back down to 2 per cent.”
The Fed’s course correction follows an August inflation report that showed alarming increases in core measures of inflation – even after already substantial rate increases this year, as well as evidence that the U.S. economy has already slowed. The apparent stubbornness of inflation has caused the Fed to toughen its talk, and back it up with a considerably steeper path and higher peak for rates.
The Bank of Canada, which has also been raising its policy rate aggressively and had already raised its rate to 3.25 per cent earlier this month, is facing somewhat different conditions. Canada’s inflation rate is more than a full percentage point below that of the United States, and both Canada’s overall inflation rate and core measures fell more than expected last month. Canadian inflation was never as high as that of the U.S., its economic growth during the COVID-19 recovery has been generally less robust, and its central bank began tightening policy earlier than the Fed did.
Most forecasters have assumed that the Bank of Canada’s key rate would peak at 4 per cent at the most. Many believe that the bank is poised to slow the pace of rate increases as soon as its next policy decision in late October, and could put its rate hikes on hold by early next year.
The Fed’s aggressive tack will require some soul-searching in the corridors of the Bank of Canada. The conditions surrounding its rate-hiking cycle have changed.
Obviously, a stalling or even recessionary U.S. economy would weigh heavily on Canada’s own economic outlook, which still looked relatively healthy when the central bank updated its projections in July. If the Fed is determined to engineer a deeper slowdown, we can expect the Bank of Canada will have little choice but to become more pessimistic in its next forecast update in October.
FIRE-FIGHTING BANK OF ENGLAND FORCED TO BUY INFLATION-LINKED BONDS
Reuters - Andy Bruce (2022-10-11)
Fire-fighting Bank of England forced to buy inflation-linked bonds
By Andy Bruce
- Summary
- Companies
- Bank of England says will buy index-linked gilts
- Purchases of 5 bln stg per day will run to end of week
- Bank warns of "material risk" to financial stability
- Move represents new headache for UK PM Truss
TORIES SAY BANK OF CANADA DESERVES ‘RUTHLESS SCRUTINY’
Bloomberg - Stephen Wicary (2022-10-05)
Canada’s main opposition Conservatives are ratcheting up pressure on the nation’s central bank, although the party’s new leader has put aside his previous call for the governor’s dismissal.
CANADA NEED ONLY LOOK TO AUSTRALIA TO SEE HOW BADLY LIBERALS HAVE MESSED UP
FP - Diane Francis (2022-10-04)
In recent weeks, Prime Minister Justin Trudeau dismissed the suggestion that Canada could be a major supplier of liquefied natural gas to Germany, questioning the “business case.” Germany is wealthy, needs to replace Russian energy, and Canada has the third biggest reserves of natural gas on the planet.
PREMIER KISHIDA WANTS JAPAN TO TAKE ADVANTAGE OF WEAK YEN
Yahoo Finance - Isabel Reynolds (2022-10-03)
Kishida is trying to ease the blow from a currency that has lost about 20% of its value this year against the dollar. The prime minister has ordered his cabinet to compile an economic package by the end of the month with an unspecified value, as higher commodity prices and a rapid weakening of the yen add to headwinds for small companies and consumers.
BANK OF CANADA TO PUBLISH SUMMARIES OF MEETINGS IN BID TO INCREASE TRANSPARENCY
G&M - Mark Rendell (2022-09-29)
The Bank of Canada will start publishing summaries of its monetary policy meetings in an effort to improve transparency and shore up its credibility as it struggles to bring down high inflation.
U.K. CENTRAL BANK INTERVENES IN MARKET TO HALT ECONOMIC CRISIS
Investment Executive (2022-09-29)
The Bank of England said it would buy long-term government bonds over the next two weeks to combat a recent slide in British financial assets. The bank’s actions are focused on long-term government debt, where yields have soared in recent days, pushing up government borrowing costs
UH, MR. POILIEVRE? CANADA PENSION PLAN PREMIUMS ARE NOT A TAX
G&M - Rob Carrick (2022-09-27)
It’s a little insensitive, but necessary, to raise the issue of retirement saving at a time when many households are struggling to pay for groceries and gas.
UNIONS URGE THE BANK OF CANADA TO HALT INTEREST RATE HIKES AS FEARS OF RECESSION GROW
G&M - Mark Rendell (2022-09-26)
Union leaders are calling on the Bank of Canada to halt further interest-rate hikes, arguing that the brunt of a potential recession will be borne by Canadian workers whose wages are already lagging behind inflation.
BANK OF ENGLAND HIKES RATES BY 50 BPS AS ECONOMY SLOWS
Yahoo Finance (2022-09-23)
The Bank of England raised its key interest rate to 2.25% from 1.75% on Thursday and said it would continue to "respond forcefully, as necessary" to inflation, despite the economy entering recession.
BANK OF CANADA’S BEAUDRY PUSHES BACK AGAINST RECESSION FORECASTS
G&M - Mark Rendell (2022-09-21)
The Bank of Canada is pushing back against the idea it will need to cause a recession to get prices under control, while assuring financial markets it will take “whatever actions are necessary” to bring inflation back to target.
PIERRE POILIEVRE’S ECONOMIC PRIORITIES ARE MORE STRAIGHTFORWARD THAN THEY SEEM
G&M - DAVID PARKINSON (2022-09-21)
When it comes to nailing down Pierre Poilievre’s economic policy, it can be hard separating the real from the surreal.
WHAT'S INSIDE CHINA'S TOOLBOX TO REIN IN EXCESS YUAN WEAKNESS?
Reuters (2022-09-21)
The yuan has lost about 4% to the dollar since mid-August to weaken past the psychologically important 7 per dollar level. The local currency also looks set for the biggest annual loss since 1994, when China unified official and market exchange rates.
The rapid yuan declines prompted the People's Bank of China (PBOC) to lower the amount of foreign exchange financial institutions must hold as reserves to rein in weakness. read more
INDEPENDENT CENTRAL BANK MAY BE ONLY DEFENSE AGAINST OTTAWA’S ‘CRISIS’ MANAGEMENT
G&M - Steven Globerman (2022-09-19)
Back in 2020, Conservative MP Pierre Poilievre accused the Bank of Canada of being an “ATM” for the Liberal government and its deficit spending, helping fuel inflation. Mr. Poilievre, now leader of his party, has also said if he’s elected prime minister, he’ll replace Tiff Macklem as governor of the central bank with someone who would reinstate the institution’s low-inflation mandate. And he’s promised to increase parliamentary oversight of the bank.
AUSTRALIA’S CENTRAL BANK REVIEW PANEL CONSIDERS BOARD SHAKE-UP
Bloomberg - Swati Pandey (2022-09-15)
Australia’s central bank faces a potential overhaul of its interest rate-setting board that may result in more monetary policy experts and fewer business people, an independent review suggested.
THE BANK OF CANADA FRONT-LOADING WON’T GUARANTEE A SOFT-LANDING: RBC
Better Dwelling (2022-09-15)
The Bank of Canada (BoC) has been on an aggressive rate hike path. Earlier this month, they hiked interest rates 75 basis points (bps) higher, bringing the overnight rate to 3.25% — the highest since the Great Recession. RBC noted this is above the 2-3% range the BoC considers to be neutral. Central banks around the world are on a similarly aggressive path to try and curb inflation.
OSFI TO WITHDRAW PANDEMIC LEVERAGE POLICY
Investment Executive - James Langton (2022-09-14)
The Office of the Superintendent of Financial Institutions (OSFI) said Tuesday that it’s planning to eliminate a temporary revision to banks’ leverage ratio rules that was introduced in April 2020. The revision allowed banks to exclude certain “high quality liquid assets” from their leverage ratio calculations.
OTTAWA’S HIRING SPREE IS BEYOND MEASURE
G&M - Patrick Brethour (2022-09-13)
There are charts galore in the Clerk of the Privy Council’s annual report to the prime minister on the state of the federal civil service, and much discussion about mission and morale.
U.S. BANK REGULATOR NAMES NEW CLIMATE CHIEF
Reuters (2022-09-13)
The U.S. Office of the Comptroller of the Currency announced Monday it had named Yue Chen as its chief climate risk officer.
TORIES ELECT POPULIST FIREBRAND POILIEVRE TO CHALLENGE TRUDEAU
Bloomberg - Brian Platt (2022-09-12)
Canada’s opposition Conservatives elected 43-year-old firebrand Pierre Poilievre as the main rival to Prime Minister Justin Trudeau.
EUROZONE INTEREST RATES IN RECORD RISE TO FIGHT INFLATION
BBC (2022-09-09)
The ECB raised its key deposit rate - how much interest it pays on deposits - to 0.75% from zero, and lifted its main refinancing rate - how much banks have to pay when they borrow money from the ECB - to 1.25% from 0.5%.
BANK OF CANADA RATE SEEN HITTING 4% OR HIGHER
FP - Larysa Harapyn (2022-09-09)
Trevin Stratton, Americas economic leader with Deloitte, talks with Financial Post’s Larysa Harapyn about how the Bank of Canada rate seen hitting 4% or higher.
BIG BANK CEOS SEE SOFT LANDING WITH PANDEMIC RELIEF ACTING AS 'SHOCK ABSORBER'
FP - Kevin Orland (2022-09-09)
The Bank of Canada’s interest-rate increases are cooling parts of the economy.
BANK OF CANADA DELIVERS 0.75 PERCENTAGE POINT RATE HIKE, SIGNALS AGGRESSIVE CAMPAIGN AGAINST INFLATION ISN’T OVER
G&M - Mark Rendell (2022-09-08)
The Bank of Canada has delivered another oversized interest rate hike and signaled that its aggressive campaign to increase borrowing costs isn’t over despite signs that inflation has peaked and the Canadian economy is starting to lose steam.
BANK CEOS SEE CANADA’S COVID SPENDING PROVIDING A SOFT LANDING
Bloomberg - Kevin Orland (2022-09-08)
Canada’s nearly C$300 billion ($228 billion) in Covid relief helped the nation navigate the pandemic’s acute phase, and now in its second act is poised to provide a soft landing for the economy.
BANK OF CANADA’S DELAYED ACTION MEANS A HARD LANDING IS MOST LIKELY: OXFORD ECON
Better Dwelling - Daniel Wong (2022-09-08)
Here’s the important part for today — BoC research shows it takes 18 to 24 months for policy to arrive to market. If the BoC wanted stable inflation, it was supposed to do it more than two years ago to get the ball rolling. Instead of coming down in a graceful landing, we’re slamming the shifters down, then up, then… you get it. Trying to force something is almost always worse than encouraging it, but at this point the BoC is stuck. This is a key point to understand the information below.
BANK OF CANADA’S DEPUTY GOVERNOR SEARCH MARKS A HISTORIC TWIST TO CENTRAL BANK’S DECISION-MAKING
G&M - DAVID PARKINSON (2022-09-07)
The Bank of Canada is looking for part-time help. And it’s a pretty big deal.
BANK OF CANADA EXPECTED TO ANNOUNCE ANOTHER OVERSIZED RATE HIKE AS BORROWING COSTS BEGIN TO BITE
G&M - Mark Rendell (2022-09-06)
The Bank of Canada is expected to announce another oversized interest rate increase this week, pushing borrowing costs into “restrictive territory,” despite signs that inflation has peaked and the Canadian economy is slowing down.
BANK OF CANADA EXPECTED TO PUSH INTEREST RATES INTO RESTRICTIVE TERRITORY
Yahoo Finance - Julie Gordon and Fergal Smith (2022-09-06)
Some economists predict the Canadian central bank may signal a pause after its anticipated hike next week, especially after the release on Wednesday of GDP data that suggested the economy may be cooling faster than expected.
BANK OF CANADA EXPECTED TO RAISE INTEREST RATE FOR FIFTH TIME AT PIVOTAL MOMENT FOR ECONOMY
G&M - Najoud Al Malees (2022-09-04)
Inflation appears to have peaked but it’s still running hot and a supersized rate hike from the Bank of Canada next week is widely expected.
OPINION: OTTAWA SHOULD STOP STOKING FOOD INSECURITY
Yahoo Finance (2022-09-01)
The federal government’s taxes and regulations are driving up costs for both farmers and the families who buy the food they produce. Food prices were up 10 per cent in July, the highest increase in more than 40 years.
FIRE THE CENTRAL BANKERS FOR THEIR INFLATION FAILURE?
FP (2022-08-31)
A reader sent an email recently to share his opinion about what would have happened to Bank of Canada governor Tiff Macklem if he led a private lender, and not an arm’s-length government institution: fired!
The ruthlessness of the private sector can be overstated. Mark Little remained CEO of Suncor Energy Inc. despite four workplace fatalities and numerous injuries over a two-year period; it took a fifth death in July to finally prompt Little’s resignation.
LIBERALS BACKTRACK ON BANK TAX
G&M - Rita Trichur (2022-08-30)
Even though that hike is consistent with plans outlined in this year’s budget, the Liberals’ 2021 election platform had originally envisioned a bigger 3-percentage-point increase to the corporate income tax rate (to 18 per cent on all earnings above $1-billion) for big banks and insurers.
U.S. FEDERAL RESERVE TACKLES INFLATION WITH ITS MOST DIVERSE LEADERSHIP EVER
G&M (2022-08-29)
When Diane Swonk first attended the Federal Reserve’s annual economic conference in Jackson Hole, Wyo., in the late 1990s, there was a happy hour for women who attended the event. It barely filled a single table.
FED CHAIR POWELL: RATES WILL RISE UNTIL 'JOB IS DONE' BRINGING DOWN INFLATION
Yahoo Finance - Brian Cheung (2022-08-29)
“We will keep at it until we are confident the job is done,” Powell said in remarks delivered at the Fed’s annual conference in Jackson Hole, Wyoming.
CENTRAL BANKERS SING IN HARMONY, BUT STOCKS DON'T LIKE WHAT THEY HEAR
Yahoo Finance (2022-08-29)
The reaction was rather different from that to a recent set of public remarks from Powell earlier in the summer, which markets decided, somewhat imaginatively, to interpret as a possibility the Fed would pivot to worrying about recession risks, sending stocks highe
BANK OF CANADA MAKES MAJOR CHANGE WITH PLAN TO ADD OUTSIDER TO RATE-SETTING COUNCIL
FP - Theophilos Argitis (2022-08-29)
The Ottawa-based central bank said Monday it will replace deputy governor Tim Lane, who retires next month, with an external candidate who will work part-time on a two-year contract.
“In a context of increasingly complex and interconnected Canadian and global economies and financial systems, it’s vital that we as an organization constantly adapt and evolve,” Macklem said in a news release. “This change provides an opportunity both to bring fresh and diverse perspectives into the Bank’s consensus-based policy decision-making framework and to ensure the Bank’s executive team has a balanced, streamlined and effective distribution of management responsibility.”
POWELL HEAPS PRESSURE ON RISK SENTIMENT AS MORE CATALYSTS LOOM
Bloomberg - Abhishek Vishnoi, Michael Wilson (2022-08-29)
The dog days of summer are firmly over as global investors absorb Federal Reserve Chair Jerome Powell’s stern message that interest rates are going higher for longer in a painful fight against inflation.
FED COULD KEEP LIFTING RATES SHARPLY ‘FOR SOME TIME’
Investment Executive - Christopher Rugaber (2022-08-29)
Some on Wall Street expect the economy to fall into recession later this year or early next year, after which they expect the Fed to reverse itself and reduce rates.
FED CHAIR POWELL HOPING TO DO A MARADONA
Yahoo Finance (2022-08-26)
Mervyn King, the former bank of England governor - and maybe more familiar to Powell than Maradona - famously linked that goal and monetary policy in a speech to illustrate how people react to what they think you are going to do rather than what you actually do.
CANADIAN DOLLAR SNAPS LOSING STREAK AS OIL PRICES JUMP
G&M (2022-08-24)
The Canadian dollar CADUSD strengthened against the greenback on Tuesday, recovering from its lowest level in nearly six weeks, as oil prices rose and investors weighed U.S. economic data that could reduce expected tightening by the Federal Reserve.
FEDERAL RESERVE RATE HIKE OF 50 OR 75 BASIS POINTS ‘REASONABLE’ NEXT MONTH, DALY SAYS
G&M (2022-08-22)
San Francisco Federal Reserve president Mary Daly on Thursday said that raising interest rates by either 50 or 75 basis points in September would be a “reasonable” way to get short-term borrowing costs where they need to be to bring inflation down.
INTERIM ARRANGEMENTS FOR THE REGULATORY CAPITAL AND LIQUIDITY TREATMENT OF CRYPTOASSET EXPOSURES
OSFI - OSFI (2022-08-19)
This advisory clarifies the interim regulatory capital and liquidity treatment of Deposit Taking Institutions’ (DTIs) and Insurers’ exposures to cryptoassets
IS ANYONE GOING TO BELIEVE THE BANK OF CANADA ANYMORE?
G&M - DAVID PARKINSON (2022-08-18)
Tiff Macklem spent much of the second half of 2021 trying to convince Canadians that rising inflation numbers were not all they were cracked up to be. He now finds himself making a similar argument in the opposite direction – as the dampener of enthusiasm for inflation’s downward turn.
NORWAY'S CENTRAL BANK ENACTS BIG RATE HIKE TO TAME INFLATION
Yahoo Finance (2022-08-18)
The rate's increase to 1.75% was larger than expected as the bank takes aim at inflation that reached 6.8% in July. It noted that unemployment is very low, falling more than expected last month to 3.2%, and “activity in the Norwegian economy is high."
'OUR JOB IS NOT DONE YET': TIFF MACKLEM SAYS BANK OF CANADA HAS MORE TO DO TO TAME INFLATION
Yahoo Finance - Stephanie Hughes (2022-08-16)
“Tuesday’s inflation number offers a bit of relief, but unfortunately, it will take some time before inflation is back to normal,” Macklem wrote in an opinion piece for the National Post on Aug. 16. “We know our job is not done yet — it won’t be done until inflation gets back to the two-per-cent target.”
COOLER INFLATION WON'T SWAY BANK OF CANADA FROM ANOTHER JUMBO HIKE IN SEPTEMBER, ECONOMISTS SAY
FP - Stephanie Hughes (2022-08-16)
“The dip in the headline rate was entirely accounted for by lower gasoline prices, which dropped to around $1.85/litre by the end of July after breaking the $2 per litre mark in June … Near-term headline inflation readings should continue to track gasoline prices lower. Indeed pump prices fell by another 6 per cent just over the first two weeks of August. Meantime, more cooling in the housing market, easing global supply chain constraints and lower commodity prices will all work to ease price pressure for a wider array of products.”
JAPAN'S YEN BEARS BRUNT OF MARKET RETHINK ON FED
Yahoo Finance - Rae Wee and Vidya Ranganathan (2022-08-12)
The Japanese yen fell the most against a resurgent U.S. dollar on Friday, as a two-day rally in equities conceded to market expectations that the Fed will have to do a lot more to contain inflation.
BANK OF ENGLAND SAYS WEAKENING REGULATORS WOULD UNDERMINE MARKET REFORMS
Yahoo Finance (2022-08-11)
Weakening the independence of regulators would undermine reforms to bolster Britain's finance industry, the head of the Bank of England said on Thursday, in a rebuff to proposals from the leading candidate to be the country's next prime minister.
MEXICO, PERU, ARGENTINA SET FOR NEW RATE HIKES: DECISION GUIDE
Yahoo Finance - Max de Haldevang (2022-08-11)
Mexico and Peru’s central banks are expected Thursday to hike their key interest rates to the highest point in more than a decade, as they continue their record tightening cycles to try to wrestle persistent inflation back under control.
ODDS OF BANK OF CANADA HIKING 75 BASIS POINTS IN SEPTEMBER JUST WENT DOWN
FP - Eerik Hertzberg (2022-08-11)
Overnight swap markets suggest about a 45 per cent chance that officials led by Governor Tiff Macklem will increase borrowing costs by three quarters of a percentage point at their Sept. 7 decision. A move of that magnitude would bring the policy rate to 3.25 per cent, the highest since April 2008.
WHY CRITICISM OF THE BANK OF ENGLAND IS LARGELY MISPLACED
FT - Bruna Skarica (2022-08-10)
With inflation higher than it has been in decades, there is no shortage of critics of the Bank of England. Still, the bulk of the blame seems largely unfounded.
U.S. CUTS SOFTWOOD TARIFFS BY HALF FOR CANADIAN LUMBER AS TRADE DISPUTE LINGERS
G&M - Brent Jang (2022-08-05)
The U.S. Department of Commerce is lowering tariffs against most Canadian softwood producers by half, but the long-running trade dispute lingers as Canada plans to appeal the decision to maintain punitive duty rates.
JAPAN'S GPIF POSTS $28 BILLION FIRST-QUARTER INVESTMENT LOSS ON MARKET TURBULENCE
Reuters - Reuters (2022-08-05)
Japan's Government Pension Investment Fund (GPIF) reported on Friday an investment loss of 3.75 trillion yen ($28.13 billion) for April-June, the second consecutive quarter of negative returns, as economic slowdown fears hit global stock markets.
THE BANK OF EEYORE GRUMBLES THE TRUTH. WHO’S NEXT?
Bloomberg - John Aurthers (2022-08-05)
It’s hard not to think of Eeyore when reading the commentary that the Bank published Thursday, in conjunction with the announcement that it would be raising rates by 50 basis points, the biggest increase since 1995 (and the biggest ever since the BoE gained its independence under Tony Blair and Gordon Brown in 1997). This is what it had to say about future prospects:
BANK OF ENGLAND ON BRINK OF BIGGEST RATE HIKE SINCE 1995
Reuters - William Schomberg (2022-08-04)
Most investors and economists predict the BoE will increase its benchmark rate by half a percentage point to 1.75%, its highest level since late 2008 at the start of the global financial crisis, when it announces its decision at 1100 GMT.
ARGENTINA NAMES ECONOMY 'SUPER MINISTER' AS CRISIS DEEPENS
Yahoo Finance (2022-07-28)
The appointment comes only a few weeks since the left-leaning Silvina Batakis was tapped as economy minister after the more moderate Martín Guzmán abruptly quit, saying he wasn't getting political support in dealing with Argentina's economic woes.
CANADIANS EXPECT SECRECY FROM FEDERAL INSTITUTIONS, BUT THE CRTC TOOK US BY SURPRISE WITH ITS ROGERS REPORT
G&M - Rita Trichur (2022-07-27)
Yes, Rogers’ responses to the CRTC’s queries were partly redacted, but the regulator kept its word and divulged enough details to give Canadians a basic understanding of how a coding error caused the company’s network to malfunction earlier this month.
IMF SUPPORTS ARGENTINA’S NEW ECONOMY MINISTER AS CRISIS DEEPENS
Yahoo Finance - Patrick Gillespie (2022-07-25)
Argentine Economy Minister Silvina Batakis “agreed on the importance of decisive program implementation,” IMF Managing Director Kristalina Georgieva tweeted Monday after meeting the new minister, who retweeted the comment.
CENTRAL BANKS TO BLAME FOR INFLATION, FORMER RBNZ CHIEF SAYS
Yahoo Finance - Matthew Brockett (2022-07-25)
That’s the view of former New Zealand central bank governor Graeme Wheeler and Bryce Wilkinson, a senior research fellow with the New Zealand Initiative think tank, who have co-authored paper released Tuesday in Wellington titled: “How Central Bank Mistakes After 2019 Led to Inflation.”
EUROPEAN CENTRAL BANK HIKES BENCHMARK INTEREST RATE FOR FIRST TIME SINCE 2011 SOCIAL SHARING
CBC (2022-07-21)
"The interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be increased to 0.50 per cent, 0.75 per cent and 0.00 per cent respectively, with effect from 27 July 2022," the bank said, referring to various rates the central bank charges banks for loans, and fees for keeping deposits at the central bank for short time period.
'OUR CREDIBILITY IS BEING TESTED:' TIFF MACKLEM SAYS PATH TO SOFT LANDING IS NARROWING
FP - Stephanie Hughes (2022-07-21)
“Our credibility is being tested, and that was an important reason why we took an unusually large step last week to send a clear message to Canadians they can be assured that we’re going to control inflation,” Macklem told CTV News’s Evan Solomon on Wednesday following the June inflation figures.
MARIO DRAGHI RESIGNS, PLUNGING ITALY INTO POLITICAL TURMOIL
Reuters (2022-07-21)
It will be the first autumn national election for more than a century in Italy, where the second half of the year is normally taken up with getting the budget law through parliament.
R.I.P. FORWARD GUIDANCE: INFLATION FORCES CENTRAL BANKS TO DITCH MESSAGING TOOL
Reuters (2022-07-21)
If the U.S. Federal Reserve killed off forward guidance in June, the European Central Bank may have just hammered the final nail in the coffin of a tool officials had long used to provide monetary policy signals to financial markets.
HISTORY TAUGHT THE BANK OF CANADA WHAT HAPPENS WHEN IT DOESN’T CONTROL HIGH INFLATION
Investment Executive - Nojoud Al Mallees (2022-07-21)
“A big difference now is sort of a strongly held notion that it’s mostly the job of the Bank of Canada to look after inflation control,” said Williamson. “In the 70s, that wasn’t true.”
UKRAINE SEEKS FOREIGN-DEBT PAYMENT HALT AS WAR HITS ECONOMY
Yahoo Finance - Volodymyr Verbyany and Daryna Krasnolutska (2022-07-20)
Ukrainian officials have for weeks explored debt restructuring as the country’s funding options dry up and the war destroys its industry. The junk-rated sovereign faces mammoth $1.4 billion foreign-debt redemption and interest payments in September, according to Finance Ministry data.
THE DOLLAR SITS ATOP A GLOBAL MONETARY ORDER SHAKEN BY SANCTIONS
FT - Isabelle Mateos y Lago (2022-07-20)
Days after Russian troops invaded Ukraine, the G7 and a host of allies in Europe and Asia declared a freeze on the assets of the Central Bank of Russia.
BOJ TO RETAIN EASY POLICY, STAYING OUTSIDE GLOBAL TIGHTENING TIDE
Reuters - Leika Kihara (2022-07-20)
The decision will come hours before that of the European Central Bank, which will consider a bigger-than-expected 50 basis point rate increase to tame soaring inflation. While rising fuel and commodity costs have pushed Japan's inflation above its 2% target, the BOJ is in no rush to withdraw stimulus as slowing global growth cloud the outlook for an economy yet to fully recover from the COVID-19 pandemic's scars.
EXAMINING FEDERAL DEBT IN CANADA BY PRIME MINISTERS SINCE CONFEDERATION, 2022
Fraser Institute - Jake Fuss (2022-07-14)
Canada’s 23 prime ministers have each left a legacy, and each of those legacies has an effect on all Canadians. One element critical to an analysis of each prime minister is whether he or she left the federal government more or less indebted than when first taking office.
BANK OF CANADA READIES RARE 75-BASIS-POINT HIKE
Bloomberg - Erik Hertzberg (2022-07-13)
The Bank of Canada is set to deliver a super-sized interest rate hike this week, as it accelerates efforts to withdraw stimulus from an overheated economy and rein in soaring inflation.
BANK OF CANADA RAISES KEY INTEREST RATE BY 1 PERCENTAGE POINT, THE BIGGEST MOVE SINCE 1998
G&M - BARRIE MCKENNA AND MARK RENDELL (2022-07-13)
The Bank of Canada increased its benchmark interest rate by one percentage point on Wednesday, the most aggressive rate hike since 1998 and a larger move than investors and private-sector economists were expecting.
MONETARY POLICY REPORT PRESS CONFERENCE OPENING STATEMENT
BOC - Tiff Macklem (2022-07-13)
First, inflation is too high, and more people are getting more worried that high inflation is here to stay. We cannot let that happen. Restoring price stability—low, stable and predictable inflation—is paramount.
THE CASE FOR STRONG AND SILENT CENTRAL BANKS
Economist (2022-07-04)
Late on june 13th, a curious article appeared in the Wall Street Journal. It said that the Federal Reserve was “likely to consider” raising interest rates by 0.75 percentage points at its meeting on June 15th.
The article was unusually silent about its sources. And it proved uncannily prescient. Two days later the Fed did indeed raise interest rates by that amount, its biggest increase in 28 years. Many investors believe the central bank had used the press to warn financial markets about what it would do in advance (albeit not very far in advance). That would make the Journal story an unconventional example of “forward guidance”.
SENIOR CIVILIAN MOUNTIE REBUKES RCMP COMMISSIONER FOR ‘APPALLING’ BEHAVIOUR DURING NOVA SCOTIA SHOOTING INVESTIGATION
G&M (2022-06-29)
A senior civilian Mountie sent a strongly worded letter to RCMP Commissioner Brenda Lucki last year, accusing her of bowing to political pressure and displaying “unprofessional and extremely belittling” behaviour to officers investigating the worst mass shooting in Canadian history.
OSFI TAKES SMALL STEP TO LIMIT HOME-EQUITY BORROWING
G&M - Rachelle Younglai (2022-06-28)
Canada’s bank regulator plans to better protect the country’s financial system by limiting how much homeowners can borrow against the value of their homes.
FORD GOVERNMENT’S APPOINTMENT OF HEATHER ZORDEL AS OSC CHAIR PROMPTS RESIGNATIONS
G&M (2022-06-27)
The Ford government’s appointment of a Bay Street lawyer and Tory fundraiser to chair Ontario’s securities regulator has prompted two high-profile resignations, as well as concerns about her conduct and her dissenting views in her decisions regarding the laws that govern the capital markets.
RUSSIA DEFAULTS ON FOREIGN DEBT FOR FIRST TIME SINCE 1918
Bloomberg - Giulia Morpurgo and Libby Cherry (2022-06-27)
For months, the country found paths around the penalties imposed after the Kremlin’s invasion of Ukraine. But at the end of the day on Sunday, the grace period on about $100 million of snared interest payments due May 27 expired, a deadline considered an event of default if missed.
BIS PUTS CBDCS AT CENTRE OF FUTURE MONETARY SYSTEM
Finextra (2022-06-24)
In the cross-border context, the BIS Innovation Hub (BISIH) has been leading practical experiments to show how central bank digital currencies (CBDCs) could help deliver faster, cheaper and more transparent international payments.
BANK OF CANADA NEEDS MORE RESTRICTIVE INTEREST RATES TO CONTROL RUNAWAY INFLATION
G&M - DAVID PARKINSON (2022-06-23)
With every new inflation report, the job facing the Bank of Canada gets that much harder.
BANK OF CANADA DEPUTY GOVERNOR TIMOTHY LANE TO RETIRE IN SEPTEMBER
FP - CP (2022-06-23)
Lane joined the central bank in August 2008 as an adviser to the governor after 20 years at the International Monetary Fund.
THE AGE OF CREDIBILITY FOR CENTRAL BANKS IS OVER
Bloomberg - John Authers (2022-06-23)
Monetary regimes don’t fall often. Half a century ago, in 1971, Richard Nixon ended the Age of Gold by formally eliminating the dollar’s peg to the precious metal. Since then, the dollar and other currencies have rested on fiat—they’re worth something because governments say they are. You could call this the Age of Credibility. In place of gold, currency’s anchor is the trust in the central banks that issue them. Now credibility appears to be at an end. With central banks desperately ripping up their playbooks to try to rein in inflation that’s veered far beyond target, they’re admitting they’ve been wrong, and giving up on trying to steer the markets on their plans for the future.
CENTRAL BANK DIGITAL CURRENCIES POISED TO BE THE FOUNDATION OF THE FINANCIAL SYSTEM, BIS SAYS
FP - Stephanie Hughes (2022-06-22)
“The technology and the technical issues are not that difficult, but once you have more than one jurisdiction involved, there are the policies and the regulations that of course, need to be reconciled,” said the BIS’s Hyun Song Shin. “What are some of the legal differences across jurisdictions that might mean that smooth flows might be impeded? So, there are more of these policy challenges that actually rear their heads in the wholesale application.”
POWELL FACES RISING CRITICISM FOR INFLATION MISSTEPS
Investment Executive - Christopher Rugaber (2022-06-22)
Inflation has proved higher and far more persistent than he or the Fed’s staff economists had foreseen. And at a policy meeting last week, Powell announced an unusual last-minute switch to a bigger interest rate hike than he had previously signaled — and then followed with a news conference that many economists described as muddled and inconsistent.
TRUDEAU IS SHIRKING CANADA’S INFLATION FIGHT, SCOTIABANK SAYS
Bloomberg - Stephen Wicary (2022-06-20)
One of Canada’s largest commercial banks fired a broadside at Prime Minister Justin Trudeau’s government, warning that high levels of federal spending are hurting the fight against inflation.
GET READY FOR INTEREST RATES TO CLIMB ‘A LOT HIGHER,’ SAYS FIRST TRUST ECONOMIST
Investment Executive - Greg Meckbach (2022-06-20)
“We think it was obvious inflation would be an issue over the last couple of years, and we believe it will continue to be an issue until we get the money supply under control,” Elass told advisors during the First Trust ETF Institute, held at the Royal York Hotel.
RE-OPENING KEYSTONE PIPELINE TALKS WON’T ADDRESS CURRENT HIGH OIL PRICES, YELLEN SAYS FOLLOWING MEETING WITH FREELAND
G&M - Bill Curry (2022-06-20)
Finance Minister Chrystia Freeland and U.S. Treasury Secretary Janet Yellen have pledged to help central banks tackle inflation by cutting back on deficit spending, but Ms. Yellen was cool to reopening Keystone pipeline talks as a way to reduce oil prices.
THE EUROPEAN CENTRAL BANK IS RUNNING OUT OF AMMUNITION TO FIGHT A NEW DEBT CRISIS
G&M - Eric Reguly (2022-06-20)
Almost exactly a decade ago, Mario Draghi, then the president of the European Central Bank, promised to do “whatever it takes” to save the euro from destruction. At the time, Greece was on the verge of stumbling – or being frogmarched – out of the euro zone; Italy, the region’s third-largest economy, was so mired in debt that it, too, seemed a candidate for departure.
CANADA’S FEDERAL ANTI-MONEY LAUNDERING RESOURCES ARE UNRELIABLE: BC PUBLIC INQUIRY
Better Dwelling (2022-06-17)
All flash and no (illicit) cash. That was the key takeaway from the Cullen Commission‘s final report looking at BC’s money laundering problem. Despite Canada talking a big game on anti-money laundering, its policies are ineffective. The Commission condemned federal anti-money laundering resources, and found Canada ignored the province’s calls for help. Austin Cullen, who led the Commission, concluded Federal resources aren’t reliable. The Province should therefore establish its own dedicated anti-money laundering enforcement team.
WHAT THE CRYPTO CRASH SAYS ABOUT PIERRE POILIEVRE’S JUDGMENT
G&M - Gary Mason (2022-06-16)
However, he can and should be questioned today about his enthusiasm for, if not outright promotion of, cryptocurrency.
CHRYSTIA FREELAND DETAILS $8.9B IN MEASURES TO TACKLE AFFORDABILITY IN FIRST MAJOR SPEECH SINCE BUDGET
CBC - Peter Zimonjic (2022-06-16)
Freeland said her plan to address inflation and the affordability crisis has five parts: respecting the role of the Bank of Canada, investing in workers, managing the debt, creating good jobs and funding the suite of programs that make up the Affordability Plan.
FP CANADA WANTS 4 MORE PROVINCES TO EMBRACE TITLE REG BY 2025
Investment Executive (2022-06-15)
Under the category of government relations, FP Canada stated it would like governments to “recognize financial planning as a profession and support its broad accessibility, through appropriate policy and regulatory frameworks” over the next three years.
U.S. FEDERAL RESERVE HIKES TARGET INTEREST RATE BY 0.75 PERCENTAGE POINT, FLAGS SLOWING ECONOMY
G&M - ANN SAPHIR AND HOWARD SCHNEIDER (2022-06-15)
The Federal Reserve on Wednesday approved its largest interest rate increase in more than a quarter of a century to stem a surge in inflation that U.S. central bank officials acknowledged may be eroding public trust in their power, and being driven by events seen increasingly out of their hands.
TRUDEAU’S FINANCE CHIEF TO LAY OUT PLAN TO COPE WITH INFLATION
Bloomberg - Brian Platt (2022-06-15)
Justin Trudeau’s finance minister will use a keynote speech to make the case that Canada’s government is ready to tackle affordability issues as consumer prices soar and borrowing costs rise sharply.
YAHOO FINANCE 'NEVER SAY NEVER': WALL STREET CONTEMPLATES A SHOCK DECISION FROM THE FED
Yahoo Finance - Brian Cheung (2022-06-14)
“Some think the Fed could deliver a surprise 75bp hike at the June meeting. Never say never in these circumstances but we think that remains very unlikely,” Evercore ISI analysts wrote Friday.
BOE EXPECTED TO GO FASTER AND FURTHER ON RATES, POLL FINDS
Bloomberg (2022-06-14)
The central bank, which had been expected to pause after hiking to 1.5%, is now predicted to lift the benchmark cost of borrowing to 2% by this time next year, according to economists surveyed by Bloomberg last week.
THE ECB IS NO LONGER AN INFLATION-TARGETING CENTRAL BANK
Bloomberg - Richard Cookson (2022-06-13)
Central banks have scarcely covered themselves in glory these past few years. Most have one goal and one goal only: to keep inflation low. In most countries, they have spectacularly failed at this job. In much of the developed world, inflation has reached many multi-year highs. But bar Turkey’s, I can’t think of a central bank whose record has been as lamentable as the European Central Bank. At least its Turkish counterpart has the excuse of being under the thumb of Recep Erdogan, the country’s president, whose contributions to economics are on a par with Vladimir Putin’s to international diplomacy.
BILL MORNEAU TALKS ABOUT THE LIBERALS’ ECONOMIC POLICY FAILINGS AS IF THEY WERE SOMEONE ELSE’S FAULT
G&M - DAVID PARKINSON (2022-06-07)
Bill Morneau isn’t wrong about the Liberal government’s failure to deliver on a long-term economic growth plan. It’s just odd that he talks about it as if it’s someone else’s fault. An awful lot of what he has criticized happened on his watch.
AUSTRALIAN CENTRAL BANK HIKES RATE FOR 2ND TIME IN 5 WEEKS
Yahoo Finance (2022-06-07)
Australia’s central bank on Tuesday lifted its benchmark interest rate for a second time in five weeks, changing the cash rate to 0.85% from 0.35%.
CENTRAL BANKERS DON’T KNOW HOW TO TACKLE INFLATION
Bloomberg - Mark Gilbert (2022-06-06)
The Federal Reserve, the European Central Bank and the Bank of England all preside over inflation rates that have surged to quadruple their 2% targets. One of their brethren is highly skeptical of their chances of success in calming price increases. It may turn out that they’ve been lucky rather than good in achieving price stability in recent years — and their luck has run out.
FED DELIVERS FUZZIER RATE MESSAGE AS IT GAUGES IMPACT OF HIKES
Bloomberg - Craig Torres (2022-06-06)
At the start of the hiking cycle, Chair Jerome Powell said the goal was “getting rates back up to more neutral levels as quickly as we practicably can.” In May, however, he walked back from the concept of neutral -- a level that neither slows nor speeds up growth -- cautioning that the discussion had a “sort of false precision.”
MORNEAU CRITICIZES LIBERALS’ ECONOMIC POLICIES IN FIRST PUBLIC SPEECH SINCE LEAVING POLITICAL LIFE
G&M - Andrew Willis (2022-06-02)
Former finance minister Bill Morneau delivered a pointed critique of the federal Liberals’ economic policies, along with a series of recommendations for kickstarting growth, in his first public speech since leaving political life two years ago.
BANK OF CANADA RAISES BENCHMARK INTEREST RATE TO 1.5%, SIGNALS MORE HIKES ON THE WAY
CBC - Pete Evans (2022-06-02)
"With ... inflation persisting well above target and expected to move higher in the near term, the [bank] continues to judge that interest rates will need to rise further," the central bank said in a statement.
CANADA'S ECONOMIC GROWTH SLOWS TO 3.1%: WHAT YOU NEED TO KNOW
FP - Kevin Carmichael (2022-06-01)
For what it’s worth, Bay Street’s average forecast ahead of the release was for growth of about five per cent, so there will be some disappointment, or maybe relief, considering growth at that pace would continue to fuel worries that the central bank had lost its grip on inflation. The Bank of Canada has been struggling to get a read on prices, but it appears to have a better idea of what’s going on with GDP.
BANK OF CANADA FACES CREDIBILITY TEST IN POLITICAL FIRESTORM OVER INFLATION
Bloomberg - Theophilos Argitis (2022-05-31)
If worrying about an overheating economy wasn’t enough trouble, Bank of Canada Governor Tiff Macklem enters a crucial six-week period in his battle against inflation with an unexpected new problem: questions about his own credibility.
BANK OF CANADA EXPECTED TO ANNOUNCE ANOTHER SUPERSIZED INTEREST RATE HIKE TO HELP TEMPER INFLATION
G&M - Mark Rendell (2022-05-30)
The Bank of Canada is expected to announce another oversized interest rate increase this week, part of its effort to push Canadian borrowing costs rapidly higher in the hope of slowing the pace of consumer price growth.
CANADA PROPOSES GUIDELINES TO MANAGE FINANCIAL RISKS FROM CLIMATE CHANGE
Yahoo Finance (2022-05-27)
The guidelines, issued by the Office of the Superintendent of Financial Institutions (OSFI), call for annual climate-related disclosures on governance, strategy, risk management, metrics and targets, and greenhouse gas emissions, as well as a transition plan, for periods starting October 2023.
U.S. FED EMBRACES 50-BASIS-POINT RATE HIKES IN JUNE, JULY TO CURB ‘VERY HIGH’ INFLATION
G&M - Howard Schneider (2022-05-26)
All participants at the Federal Reserve’s May 3-4 policy meeting backed a half-percentage-point rate increase to combat inflation they agreed had become a key threat to the economy’s performance and was at risk of racing higher without action by the U.S. central bank, minutes of the session showed on Wednesday.
FED OFFICIALS RAISED POSSIBILITY OF ‘RESTRICTIVE’ POLICY TO FIGHT INFLATION
FT - James Politi (2022-05-26)
Federal Reserve officials discussed the possibility of moving the US central bank to a “restrictive” policy stance that would better fight inflation through more aggressive interest rate increases, but worried that this could undermine the strong recovery in the jobs market.
DELAYS TO OTTAWA’S PLEDGE TO LOWER CREDIT CARD TRANSACTION FEES HAS SMALL BUSINESSES WORRIED
G&M - Chris Hannay (2022-05-25)
Independent retailers have an array of overhead costs, but there is one that Juliann Barry calls the silent killer: credit-card transaction fees.
RUBLE RALLY POWERS ON EVEN AFTER CAPITAL CONTROLS DIALED BACK
Yahoo Finance - Bloomberg (2022-05-24)
The ruble was stronger for a fifth day against the dollar, trading up 2% even after Russia on Monday loosened capital controls by reducing the amount of foreign currency exporters are required to convert.
FINANCE MINISTER CHRYSTIA FREELAND DEFENDS BANK OF CANADA AMID POILIEVRE ATTACKS
FP - Julie Gordon (2022-05-24)
“It is clear to us all that we are living through a period of global volatility. We have COVID. We have the Russian invasion of Ukraine. We have China’s zero-COVID policy,” Freeland told reporters by teleconference from Munich, Germany after a G7 meeting.
UK REGULATOR COUNTERS CLIMATE DENIER CLAIM
Reuters - Carolyn Cohn (2022-05-24)
UK pension schemes should not ignore climate change, a senior executive at The Pensions Regulator said on Monday, the first watchdog to weigh in after a top HSBC banker was suspended after playing down the financial risks of climate change.
ALBERTA PREMIER JASON KENNEY RESIGNING AS UCP LEADER DESPITE NARROW WIN IN LEADERSHIP REVIEW
CBC - Michelle Bellefontaine (2022-05-19)
Alberta Premier Jason Kenney announced his resignation as United Conservative Party leader Wednesday after receiving 51.4 per cent approval of his leadership from UCP members.
CHINA SAYS SENIOR CENTRAL BANK OFFICIAL UNDER INVESTIGATION
Bloomberg (2022-05-18)
Born in 1972, Sun joined the People’s Bank of China in 1996 and has spent most of his career at the monetary policy department. He’s been at the forefront of the PBOC’s transformation into a modern central bank over the years and took part in many key milestones, including creating the interbank bond market, launching open market operations, establishing the yuan exchange rate forming mechanism, and most recently, revamping the interest rates.
US SET TO BLOCK RUSSIAN DEBT PAYMENTS, RAISING DEFAULT ODDS
Bloomberg - Seleha Mohsin (2022-05-18)
The end of the carve-out could be the final straw in Russia’s debt saga after almost three months of war in Ukraine. It’s managed to make all its payments to creditors so far, weaving through the tangle of sanctions that closed off some avenues.
YAHOO FINANCE POWELL: 'SOME PAIN' MAY BE REQUIRED TO SLOW INFLATION
Yahoo Finance - Brian Cheung (2022-05-18)
Federal Reserve Chairman Jerome Powell said Tuesday that the central bank will continue to raise short-term interest rates — which will likely slow economic activity — until there is “clear and convincing evidence” that inflation is coming down.
ECB TELLS BANKS TO BUCKLE UP AS UKRAINE WAR HITS ECONOMY
Reuters (2022-05-18)
"We have asked banks to reassess their projections and capital trajectories in the light of the new macroeconomic picture, also considering adverse scenarios," Enria told Italian daily Repubblica.
THAT TIME THE PRIME MINISTER SQUARED OFF AGAINST THE CENTRAL BANKER
FP - Joe O'Connor (2022-05-16)
“I don’t want to seem like a flashy Joe,” he would say.
YAHOO FINANCE CANADA VIDEOS WHY BANK OF CANADA CRITICISM IS JUSTIFIED
Yahoo Finance - Yahoo (2022-05-16)
On this episode of Editor's Edition, Yahoo Finance Canada's Alicja Siekierska and the Public Policy Forum's Sean Speer discuss the criticism being aimed at the Bank of Canada. Speer argues that the debate around the Bank’s decisions – as well as of other institutions – is justified in the post-pandemic recovery.
INTEREST RATE TRAJECTORY WILL DEPEND HEAVILY ON HOUSING MARKET, BANK OF CANADA DEPUTY GOVERNOR SAYS
G&M - Mark Rendell (2022-05-13)
The Bank of Canada needs to keep raising interest rates to tackle runaway inflation, deputy governor Toni Gravelle said on Thursday – although how high rates go will depend on how the housing market responds to rising borrowing costs.
PIERRE POILIEVRE FANS FRUSTRATION ABOUT CANADA’S INFLATION WOES
G&M - DAVID PARKINSON (2022-05-13)
In his loud and frequent criticism of the Bank of Canada, Pierre Poilievre has been getting a lot of mileage out of how the central bank started the COVID-19 crisis thinking deflation, not inflation, would be the country’s big worry. The Conservative Party leadership candidate recently called the bank’s brain trust “financially illiterate” for getting the inflation call so badly wrong.
BANK OF CANADA’S 1% POLICY RATE ‘TOO STIMULATIVE,’ GRAVELLE SAYS
Yahoo Finance - Erik Hertzberg (2022-05-13)
Speaking in Montreal, the deputy governor outlined how higher commodity prices, global supply chain issues, and the reopening of economies are pushing up inflation. Gravelle also said that the bank’s near-term forecasts for price gains are likely to be revised up, adding that “inflation pressures have been higher and more tenacious than we expected.”
WHAT YOU NEED TO KNOW ABOUT PIERRE POILIEVRE'S THREAT TO FIRE TIFF MACKLEM
FP - Kevin Carmichael (2022-05-13)
Here’s what Poilievre, member of Parliament for Carleton, a riding on the outskirts of Ottawa, said he’d do with Macklem during a debate with the other leadership candidates in Edmonton on May 11: “I would replace him with a new governor who would reinstate our low-inflation mandate, protect the purchasing power of our dollar, and honour the working people who earned those dollars.”
U.S. SENATE CONFIRMS POWELL FOR SECOND TERM AS FED CHIEF IN BIPARTISAN VOTE
Reuters - David Morgan (2022-05-13)
Most of the nays were Republicans, though a few Democrats, including Robert Menendez and Elizabeth Warren, joined them. Menendez said Powell had not done enough to promote diversity in the Fed's leadership, while Warren said he had fallen short on bank regulation.
'WE'RE NOT GETTING IT PERFECT': CAROLYN ROGERS SAYS THE BANK OF CANADA IS LEARNING FROM ITS MISTAKES
FP - Kevin Carmichael (2022-05-12)
The Bank of Canada’s leaders dislike how they’ve been dragged into a partisan political contest. But they didn’t need Pierre Poilievre’s emergence as Canada’s answer to former United States congressman Ron Paul to know that a segment of the population has lost faith in them.
ECB TO START RAISING RATES GRADUALLY THIS SUMMER - VILLEROY
Reuters - Reuters (2022-05-11)
He said he expected inflation to remain "high" for the rest of 2022 but added that inflation should get back down to around the 2% level by 2024.
FED WARNS OF WORSENING MARKET LIQUIDITY IN STABILITY REPORT
Bloomberg - Matthew Boesler (2022-05-10)
The Federal Reserve warned of deteriorating liquidity conditions across key financial markets amid rising risks from the war in Ukraine, monetary tightening and high inflation in a semi-annual report published Monday.
BANK OF CANADA'S CAROLYN ROGERS SAYS SUPPLY IS THE KEY TO SOLVING HOUSING PROBLEM
FP - Stephanie Hughes (2022-05-06)
“We have to fix the supply problem,” Rogers said this week in an interview, her first since replacing Carolyn Wilkins as governor Tiff Macklem’s No. 2 in December. “We keep trying these different things to dampen demand and Canadians still want houses. We have immigration coming in, (and) we have a strong economy.”
BOC REACHING OUT TO INDIGENOUS GROUPS ON ECONOMIC RECONCILIATION
Investment Executive - CP (2022-05-06)
Schembri says the central bank hopes it can take a meaningful step toward building trust and strengthening its relationship with Indigenous peoples.
U.S. FEDERAL RESERVE RAISES INTEREST RATE BY HALF POINT, LARGEST HIKE IN TWO DECADES
G&M - Mark Rendell (2022-05-05)
Fed chair Jerome Powell said he expects the committee will consider increasing the policy rate by 50 basis points at each of its next two meetings, which would bring the Fed Funds rate back above prepandemic levels by the middle of the summer. At the same time, he seemed to rule out an increase of 75 basis points, saying that “is not something the committee is actively considering.”
BANK OF CANADA OPENED THE DOOR FOR TODAY’S INDEPENDENCE QUESTIONS AT A PODIUM TWO YEARS AGO
G&M - DAVID PARKINSON (2022-05-05)
What was striking about the speech this week from the Bank of Canada’s No. 2 official on the importance of central-bank independence wasn’t what she had to say. It was that the bank felt compelled to say it at all.
INFLATION IN TURKEY SOARS TO EYE-POPPING NEAR 70% IN APRIL
Yahoo Finance - Yahoo (2022-05-05)
Turkey’s central bank has cut rates by 5 percentage points since September, to 14%, despite high inflation rates — before pausing them in January. The Turkish lira lost 44% of its value against the U.S. dollar last year.
BANK OF ENGLAND SET FOR 4TH STRAIGHT RATE HIKE TO FIGHT INFLATION
Reuters - William Schomberg (2022-05-05)
The Bank of England looks poised to raise interest rates on Thursday for the fourth time since December, the fastest increase in borrowing costs in a quarter of a century as it tries to quell the danger from the leap in inflation.
CENTRAL BANKERS ARE HANDCUFFED BY OLD NARRATIVES
Bloomberg - Clive Crook (2022-05-05)
In the space of a few short months, the prevailing narrative on U.S. inflation has veered from “It’s transitory” to “We have a problem.” This week, the Federal Reserve took another step toward acknowledging this, raising its policy rate by 50 basis points and leading investors to expect a faster pace of tightening from now on. That’s fine, you might say, the facts have changed – and to paraphrase John Maynard Keynes, when the facts change, you change your story. What’s interesting is that the story has changed more abruptly than the facts.
BANK OF CANADA DEFENDS ITS CREDIBILITY AND INDEPENDENCE IN FACE OF SOARING INFLATION, CONSERVATIVE CRITICISM
G&M - Mark Rendell (2022-05-04)
The Bank of Canada has ramped up efforts to defend its credibility amid soaring inflation and pointed criticism from Conservative politicians who say it has lost its independence from the government.
THE FED IS ABOUT TO DO SOMETHING IT HAS NOT DONE IN TWO DECADES
Yahoo Finance - Brian Cheung (2022-05-04)
Brian Cheung
·Reporter
RAPID RATE HIKES CRITICAL TO ‘BREAK’ RISING INFLATION EXPECTATIONS, SAYS FORMER BOC GOVERNOR DAVID DODGE
G&M - DAVID PARKINSON (2022-05-03)
David Dodge has been in the corridors of Canadian economic policy making and the battle against inflation for a half-century.
DAVID ROSENBERG: THE FED IS TIGHTENING AND THAT USUALLY MEANS RECESSION, NO MATTER WHAT THEY SAY
FP - David Rosenberg (2022-05-02)
Recent research from a number of sources also cast doubt on Powell’s statement. As such, rather than buying into the Fed’s fantasy, inventors should exercise caution and shift away exposure from cyclical sectors into more defensive ones.
TIFF MACKLEM ACKNOWLEDGES MISJUDGING INFLATION, PLEDGES TO ACT 'FORCEFULLY' TO BRING IT DOWN
FP - Stephanie Hughes (2022-04-29)
“(We’re coming) out of the deepest recession we’ve ever had,” Macklem said during testimony at the Senate banking committee late on April 27. “We got a lot of things right. We got some things wrong, and we are adjusting.”
TIFF MACKLEM DOUBLES DOWN ON MESSAGE THAT CANADIANS SHOULD PREPARE FOR HIGHER INTEREST RATES
G&M - Mark Rendell (2022-04-28)
The Bank of Canada is prepared to raise interest rates “forcefully if needed” to get inflation under control, Governor Tiff Macklem said Wednesday, doubling down on the message that Canadian households and businesses should brace for higher borrowing costs over the coming year.
NEW INVESTING ORDERS SHOULD MAKE IT SIMPLER TO DEPLOY FUNDS: INFRASTRUCTURE BANK CEO
Yahoo Finance - Yahoo (2022-04-27)
The Liberals infused the infrastructure bank with $35 billion in federal financing to pull in two or three times that in private dollars, arguing it would stretch Ottawa's capacity to fund the building of more roads, bridges, energy, water and wastewater systems.
MACKLEM HINTS AT A SECOND HALF-POINT RATE HIKE, WHILE DOUSING TALK HE COULD GO BIGGER
FP - Kevin Carmichael (2022-04-26)
“Anything bigger than a 50-point increase would be very unusual,” Macklem said during testimony at the House finance committee on April 25.
BANK OF CANADA REBUKES CLAIMS PIERRE POILIEVRE HAS MADE ON INFLATION, CRYPTOCURRENCY
National Post - Catherine Levesque (2022-04-26)
Poilievre, who lost his role as Finance critic ever since he decided to run for his party’s main job, was not there to butt heads against Bank of Canada Governor Tiff Macklem and Deputy Governor Carolyn Rogers during the Parliamentary Finance Committee on Monday.
THE BANK OF CANADA RELEASES ITS ANNUAL REPORT FOR 2021
BOC - BOC (2022-04-26)
The Bank of Canada’s Annual Report for 2021 was tabled in the House of Commons today. The Report is now available on the Bank’s website.
OPENING STATEMENT BEFORE THE HOUSE OF COMMONS STANDING COMMITTEE ON FINANCE
BOC - Tiff Macklem (2022-04-26)
The Bank’s primary focus is inflation. Consumer price index (CPI) inflation in Canada hit a three-decade high of 6.7% in March, well above what we projected in the January MPR. The war has driven up the prices of energy and other commodities, and it is further disrupting global supply chains. While most of the factors pushing up inflation come from beyond our borders, with the economy in excess demand, we are facing domestic price pressures too. About two-thirds of CPI components are growing above 3%, which means Canadians are feeling inflation across their household budgets, from gas to groceries to rent.
HIGHER RATES WILL COST CANADIANS BILLIONS IN GOVERNMENT DEBT INTEREST
FP - Tegan Hill and Jake Fuss (2022-04-25)
In the decade leading up to the pandemic, Canadian governments collectively accumulated approximately $525 billion in net debt — this despite a growing national economy in nine of the 10 years. COVID-19 then exacerbated the problem, as governments increased spending and amassed hundreds of billions in additional debt during 2020 and 2021. In its recent budget, the federal government alone projects its net debt will surpass $1.3 trillion this fiscal year (2022-23) and continue climbing until at least 2026-27.
MACRON DEFEATS LE PEN TO BE RE-ELECTED FRENCH PRESIDENT
FT - Victor Mallet, Leila Abboud and Sarah White (2022-04-25)
Emmanuel Macron has defeated his far-right rival Marine Le Pen to be re-elected president of France, vowing to tackle the country’s “doubts and divisions” during his second five-year term.
BANK OF CANADA’S TIFF MACKLEM WON’T RULE OUT EVEN LARGER INTEREST RATE HIKES
G&M - Mark Rendell (2022-04-22)
The Bank of Canada might consider hiking its benchmark interest rate by more than 50 basis points in a single move as it pushes borrowing costs higher to try to quell runaway inflation, Governor Tiff Macklem suggested on Thursday.
BUILDING BACK BIGGER: HOW OTTAWA GREW UNDER COVER OF COVID
FP - William Robson and Alexandre Laurin (2022-04-22)
The 2022 federal budget highlights their success. Ottawa’s last pre-COVID projections, in its 2019 fall update, showed federal spending at $421 billion in fiscal year 2024-25. The 2022 budget’s projections have it at $479 billion a year (adding back $2 billion in pension obligations the government stopped including meanwhile). That’s $58 billion more, long after COVID-related measures are gone. The slogan we should have been hearing is “Build back bigger!”
BOE'S BAILEY SAYS THERE SHOULD BE "NO APPEASEMENT" OF RUSSIA
Reuters - Reuters (2022-04-22)
Western countries should not appease Russia following its invasion of Ukraine even if there are difficult economic consequences, Bank of England Governor Andrew Bailey said on Thursday.
CAN THE BANK OF CANADA POSSIBLY GET INFLATION BACK DOWN NEAR 2 PER CENT?
G&M - DAVID PARKINSON (2022-04-21)
With every monthly release of Canada’s consumer price index, the gap between inflation and the Bank of Canada’s 2-per-cent target grows more cavernous – and the task to close it increasingly Herculean.
RUSSIA SAYS IT WILL NO LONGER DISCLOSE THE NAMES OF ORGANIZATIONS THAT USE ITS ALTERNATIVE TO THE SWIFT PAYMENT SYSTEM
Yahoo Finance - Huileng Tan (2022-04-20)
"Under the current conditions we have made the decision not to reveal the list of organisations connected to SPFS. Still, this list is available for users of the system," the Russian central bank told Reuters in an email. The institution used to publish a list of SPFS users on the website but recently stopped the practice, per Bloomberg.
CALLING TIME ON QE, CENTRAL BANK ASSET CULL ADDS NEW MARKET RISKS
Reuters - Howard Schneider and William Schomberg (2022-04-20)
Major central banks, already plotting interest rate hikes in a fight against inflation, are also preparing a common pullback from key financial markets in a first-ever round of global "quantitative tightening" expected to restrict credit and add stress to an already-slowing world economy.
RUSSIAN CENTRAL BANKER NABIULLINA GETS HIT WITH SANCTIONS
Bloomberg - Brian Platt (2022-04-20)
Canada sanctioned Russian central bank Governor Elvira Nabiullina and 13 other “close associates of the Russian regime” in a fresh round of penalties related to the war in Ukraine.
RUSSIA'S DEBT DEFAULT WILL BE ONE OF THE HARDEST IN HISTORY TO RESOLVE AND COULD SEE THE US SEIZE THE CENTRAL BANK'S ASSETS, ECONOMIST SAYS
Yahoo Finance - Harry Robertson (2022-04-19)
EU WARNS PUTIN’S RUBLES-FOR-GAS DEMAND WOULD BREAK SANCTIONS
Yahoo Finance - Alberto Nardelli (2022-04-14)
European governments -- and companies -- are still grappling with what the decree means in operational terms. The person said the EU would work with national authorities to inform European companies that hold contracts of the assessment and provide guidance. The Dutch government has backed the EU analysis and said it won’t allow its companies to follow through with the Russian payment demand.
CIRCLING THE TOILET BOWL OF SOCIALISM
FP - Matthew Lau (2022-04-13)
Had I been in charge of titling last week’s federal budget, it would have been called something like “Circling the toilet bowl of socialism.” We’re not quite in the bowl yet, but with this budget, we’re circling it. The Liberals instead called their budget “A Plan to Grow Our Economy and Make Life More Affordable,” a far less accurate description, for their policies are exactly the opposite of what they should be if they really want to grow the economy. As a matter of basic economics, to encourage economic growth, taxes must be low, simple, predictable, and broadly applied, in order to minimize distortions and provide certainty. The Liberals have broken all the rules of sensible taxation by making taxes higher, more distortionary, more arbitrary, and less certain.
IS NEW ZEALAND RAISING RATES INTO A RECESSION?
Bloomberg - Daniel Moss (2022-04-13)
For New Zealand, having the most hawkish central bank in Asia doesn't go far enough. Officials are intensifying their battle against inflation, even as confidence ebbs and the vital housing industry teeters. Is the country racing toward a recession?
MONETARY POLICY REPORT – APRIL 2022
BOC - Tiff Macklem (2022-04-13)
11 AM today Maklem will disuss BOC monetary policy.
BANK OF CANADA EXPECTED TO ANNOUNCE OVERSIZED RATE HIKE THIS WEEK
G&M - Mark Rendell (2022-04-11)
The Bank of Canada is expected to announce its first oversized interest-rate hike in more than two decades this week after hawkish comments from the country’s top central bankers and growing signs that the economy is overheating.
RUSSIA CALLS FOR INTEGRATING BRICS PAYMENT SYSTEMS
Reuters - Reuters (2022-04-11)
Russia, hit by Western sanctions, has called on the BRICS group of emerging economies to extend the use of national currencies and integrate payment systems, the finance ministry said on Saturday.
RUSSIA TO HALT BOND SALES FOR THIS YEAR AS INTEREST COSTS SURGE
Bloomberg - Kira Zavyalova (2022-04-11)
Russia will halt bond auctions for the remainder of 2022 due to prohibitive borrowing costs, Finance Minister Anton Siluanov was quoted as saying by Russian newspaper Izvestia.
FEDERAL BUDGET EARMARKS $56-BILLION IN NEW SPENDING, HIGHER TAXES AS CRITICS FEAR IT WILL FUEL INFLATION
G&M - Bill Curry (2022-04-08)
The federal government’s 2022 budget plan lays out more than $56-billion in new spending over six years, as part of a package Finance Minister Chrystia Freeland says will boost innovation and green technology.
FEDERAL BUDGET 2022 TO INCLUDE $10-BILLION FOR AFFORDABLE HOUSING
G&M - Bill Curry (2022-04-07)
Finance Minister Chrystia Freeland will table a budget on Thursday that promises $10-billion to make housing more affordable for Canadians, provides $8-billion in new defence spending, and aims to spur economic growth through green initiatives and a small-business tax cut.
CAN THE FED SHRINK ITS $9TN BALANCE SHEET WITHOUT CAUSING MARKET MAYHEM?
FT - Colby Smith (2022-04-07)
After months of debate, the Federal Reserve has a plan to shrink its $9tn balance sheet as it tries to tighten monetary policy and tackle the highest inflation in decades.
CANADA’S SUPERCLUSTERS AWAIT FATE IN 2022 FEDERAL BUDGET AS FUNDING DWINDLES
G&M - Sean Silcoff (2022-04-07)
It was the centrepiece of the federal Liberal government’s first innovation strategy: a $950-million “supercluster” program aimed at bringing together academia and business to collaborate in unprecedented ways, spinning out companies and creating jobs, economic growth and intellectual property.
SCOTIABANK CEO CALLS FOR FEDERAL COMMISSION TO STUDY LONG-TERM ECONOMIC GROWTH ISSUES
G&M - James Bradshaw (2022-04-06)
Bank of Nova Scotia
MP REMPEL GARNER PUSHES FOR NATIONAL CRYPTO REGULATION FRAMEWORK IN BILL
FP - Stephanie Hughes (2022-04-06)
Bill C-249, which saw its first reading in early February, would call on the Minister of Finance to consult with crypto industry innovators designated by provinces and territories to develop the framework. The bill also states that policy must focus on lowering barriers to entry in the crypto sector and protect industry innovators from crushing administrative burdens.
BANK OF CANADA SURVEY SHOWS MOST BUSINESSES THINK IT WILL TAKE AT LEAST TWO YEARS TO GET INFLATION UNDER CONTROL
FP - Kevin Carmichael (2022-04-05)
The central bank polls a representative group of companies every quarter to give it a sense of the mood inside the country’s C-suites. It was no surprise the latest Business Outlook Survey turned up anxiety over prices, which have risen to the highest in more than three decades, according to Statistic Canada’s consumer price index.
THE BIG RIFT: CORPORATE CANADA WANTS OTTAWA TO FOCUS ON REAL GROWTH, NOT ‘SUGAR POPS’ ECONOMICS
G&M - James Bradshaw (2022-04-04)
One week before the release of the federal government’s pivotal 2022 budget, Royal Bank of Canada chief executive Dave McKay was uneasy as he surveyed the daunting challenges ahead for Canada’s economy.
BANK OF CANADA’S TIFF MACKLEM TAKES ON NEW ROLE OVERSEEING GLOBAL BANK RULES
G&M - Mark Rendell (2022-04-04)
Bank of Canada governor Tiff Macklem is taking on a new role overseeing the global banking system as the chair of a group of central bankers that oversees the Basel Committee on Banking Supervision.
BRACE YOURSELF: INTEREST RATES COULD BE HEADED UP EVEN FASTER AND HIGHER THAN WE THOUGHT SOCIAL SHARING
CBC - Pete Evans (2022-04-01)
While economists expect the bank to gradually raise its rate another half-dozen times or so this year, there's a growing sense that the bank may need to start moving faster and more dramatically than anticipated to rein in inflation, which is already at its highest level in a generation.
FAITH IN BANK OF CANADA INFLATION-FIGHTING CHOPS CLIMBS IN POLL
Bloomberg - Erik Hertzberg (2022-03-31)
Although a majority of Canadians are still doubtful inflation will be reined in, even a small pick-up in confidence is a welcome development for policymakers led by Governor Tiff Macklem. Bank of Canada officials have been warning they plan to act decisively with aggressive rate hikes to quell inflation, which has hit a three-decade high of 5.7%.
WHY THE BANK OF CANADA IS NOW 'TALKING TOUGH' ON INFLATION
FP - Larysa Harapyn (2022-03-30)
Dennis Mitchell, CEO and CIO at Starlight Capital, talks with Financial Post’s Larysa Harapyn about why the Bank of Canada is now ‘talking tough’ on inflation.
TRUDEAU CLIMATE PLAN SEEKS 42% CUT IN OIL AND GAS EMISSIONS
Yahoo Finance - Brian Platt, Robert Tuttle (2022-03-30)
Trudeau’s blueprint promises industry a tax credit to help pay for carbon-capture projects, details of which may come as soon as next week’s federal budget. It doesn’t, however, include a specific emissions cap on the fossil-fuel sector, which accounts for about a tenth of Canada’s total economic output.
UKRAINE OFFERS NEUTRALITY IN EXCHANGE FOR NATO-STYLE SECURITY GUARANTEES AT RUSSIA TALKS
Reuters - Reuters (2022-03-30)
Ukraine proposed adopting neutral status in exchange for security guarantees at talks with Russia in Turkey, meaning it would not join military alliances or host military bases, Ukrainian negotiators said on Tuesday.
FALLOUT FROM 2021 CERB HACK CONTINUES TO AFFECT TAXPAYERS, CRA
G&M - Patrick Brethour (2022-03-29)
Chris Chezepock had the nasty shock last year of finding out he was one of the thousands of taxpayers whose online accounts with the Canada Revenue Agency had been accessed by hackers looking to fraudulently obtain pandemic benefits.
THE BANK OF CANADA WILL ALMOST CERTAINLY TAKE THE STEEPER PATH TO HIGHER RATES NEXT MONTH
FP - Kevin Carmichael (2022-03-29)
Higher interest rates won’t guarantee rain on the Prairies this summer, and Macklem has no influence over international oil prices. Bay Street economist David Rosenberg’s argument that central banks are about to trigger a recession is a good one. Alas, if you’re Macklem, and your primary job is keeping year-over-year increases in the consumer price index at about two per cent, the most recent set of data leave you with only one choice: reel faster.
BOC IS SUDDENLY ABLE TO TACKLE INFLATION AFTER WE EXPLAIN TO PARLIAMENT WHAT THEY DID
Better Dwelling - Stephen Punwasi (2022-03-29)
Supply chain issues exist, but not to the extent they’re making them out to be — especially before Ukraine. As we explained last week, this isn’t a regular amount of demand failing to be met. This is excess demand for goods, far more than normal supply levels satisfy. The increased demand is the intended consequence of loose monetary policy. The BoC actively tried to create demand that outran supply, to create more inflation.
BANK OF CANADA EXPECTED TO BEGIN DOUBLING RATE HIKES NEXT MONTH, REVERSE QE
Better Dwelling - Daniel Wong (2022-03-29)
The BoC estimates 1.75% is the low range of the neutral policy rate, which will be hit within months. A neutral policy rate is the point where monetary policy provides no influence. Below the neutral is expansionary, meaning stimulus for economic growth. Above the neutral rate is when monetary policy slows growth. The BoC estimates the neutral range to be between 1.75% and 2.75%, with more forecasts now predicting the higher end of the range will be needed.
CLEVELAND FED FINDS SOME DATA UNDERSTATE INFLATION TREND
WSJ - Michael S. Derby (2022-03-28)
Underlying levels of inflation haven’t been as moderate as some recent Federal Reserve data have shown.
FEDERAL DEFICIT WAS $75.3 BILLION FOR FIRST NINE MONTHS
Investment Executive - CP (2022-03-28)
The federal government posted a budgetary deficit of $75.3 billion for the April-to-January period of its 2021-22 fiscal year.
CANADA 'FAIRLY CLOSE' TO A DEBT CRISIS, WARNS MAGNA FOUNDER FRANK STRONACH
FP - Staff (2022-03-25)
The Magna International Inc founder was speaking on BNN Bloomberg Wednesday after writing an op-ed for the National Post this week.
BESIDES CHINA, PUTIN HAS ANOTHER POTENTIAL DE-DOLLARIZATION PARTNER IN ASIA
Council on Foreign Relations - Zonhyuan Zoe Liu (2022-03-25)
An unintended consequence of Western punitive sanctions could be strengthening a Russia-China de-dollarization partnership. Joining such a partnership may also appeal to India. India has reportedly expressed interest in jointly exploring with Russia and China an alternative to SWIFT that would allow it to trade with countries under U.S. sanctions.
RUSSIA BONDS RISE, DEFAULT RISK TUMBLES AS PAYMENT SENT TO CITI
Yahoo Finance - Giulia Morpurgo, Laura Benitez and Lyubov Pronina (2022-03-18)
JPMorgan Chase & Co. has processed the funds and sent the money on to Citigroup Inc., the people said, spurring optimism that the bonds may still be settled in dollars. Bondholders, however, are still waiting for the $117 million payment. Four investors in Europe and three in Hong Kong had yet to receive funds as of 9 a.m. in London. S&P Global Ratings warned that the “technical difficulties” in getting the money to investors was increasing the risk of a default -- either this time around or in the future.
BOC TAKES ANOTHER STEP IN DIGITAL CURRENCY RESEARCH, PARTNERING WITH MIT
Investment Executive - Daniel Calabretta (2022-03-18)
In 2020, the BoC published a background note about its official position on a CBDC pertaining to public policy, design, technology and risk management issues the central bank was considering as it builds out its capacity to issue a digital currency if the need arises.
TRUDEAU’S FINANCE CHIEF HAS MORE ROOM TO SPEND IN APRIL BUDGET
Bloomberg - Theophilos Argitis (2022-03-17)
Revenue could surpass projections by as much as C$30 billion ($23.6 billion) over the next two years, though the governing Liberals are likely to book a more conservative amount given extreme levels of uncertainty and volatility as a result of Russia’s war in Ukraine.
THE FED’S FIREFIGHT WITH INFLATION FINALLY BEGINS: MORNING BRIEF
Yahoo Finance - Brian Cheung (2022-03-16)
The Fed’s next steps after today’s initial bump will be critical. With inflation clearly not “transitory,” the Fed may have to lean on some 0.50% hikes (that hasn’t happened since 2000) and a reduction in its $9 trillion balance sheet (that’s never been attempted at this scale) if price increases get even worse.
THE $140 BILLION QUESTION: CAN RUSSIA SELL ITS HUGE GOLD PILE?
Bloomberg - Eddie Spence (2022-03-16)
Bank of Russia expanded its gold reserves almost sixfold since the mid-2000s, creating the world’s fifth-biggest stockpile that’s valued at about $140 billion. It’s the type of asset it could sell to shore up the ruble, which has plunged as global economies isolate Russia following its invasion of Ukraine.
THE PRICE OF BIDEN’S EXCUSES FOR INFLATION KEEPS RISING
WSJ - Gerald Baker (2022-03-16)
‘Make no mistake, inflation is largely the fault of Putin.”
SAUDI ARABIA CONSIDERS ACCEPTING YUAN INSTEAD OF DOLLARS FOR CHINESE OIL SALES
WSJ - Summer Said (2022-03-16)
Saudi Arabia is in active talks with Beijing to price some of its oil sales to China in yuan, people familiar with the matter said, a move that would dent the U.S. dollar’s dominance of the global petroleum market and mark another shift by the world’s top crude exporter toward Asia.
WHAT WOULD A RUSSIAN BOND DEFAULT MEAN?
Investment Executive - AP (2022-03-16)
So Russia has the money to pay but says it can’t because of the sanctions that have restricted banks and frozen much of its foreign currency reserves. Ratings agencies have downgraded Russia’s credit rating to below investment grade, or “junk.” Fitch rates Russia “C,” meaning in Fitch’s view “a sovereign default is imminent.”
THE HUMBLING OF THE FEDERAL RESERVE
WSJ - Staff (2022-03-15)
The Federal Open Market Committee meets Tuesday and Wednesday, as it seeks to address the worst inflation in 40 years amid new risks to economic growth. Whatever the Fed decides on interest rates, it’s worth recalling how the central bank arrived at this unhappy moment.
WHITE HOUSE LAYS OUT GROUND RULES FOR DIGITAL ASSETS
Finextra - Finextra (2022-03-10)
The Order lays out a national policy for digital assets across six key priorities: consumer and investor protection; financial stability; illicit finance; US leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation.
RATE HIKES WILL HIT CANADA’S KEY GROWTH ENGINE HARDEST. WILL OTHER SECTORS PICK UP THE SLACK?
G&M - DAVID PARKINSON (2022-03-08)
The day after the Bank of Canada raised its policy interest rate off its pandemic-emergency floor, the central bank’s Governor, Tiff Macklem, faced down worried questions about the strains rising borrowing costs were about to place on the backs of Canadians.
BANK OF CANADA GOVERNOR TIFF MACKLEM WARNS OF BROADENING INFLATION, SIGNALS AGGRESSIVE RATE HIKE PATH
G&M - Mark Rendell (2022-03-04)
Bank of Canada Governor Tiff Macklem said the central bank could be aggressive in pushing up borrowing costs this year, as inflationary pressures broaden and commodity prices move sharply higher in response to Russia’s invasion of Ukraine.
ECB LEARNS A LESSON ON HOW TO RUN A BOND MARKET
Bloomberg - Marcus Ashworth (2022-03-04)
The rate of change in financial markets has accelerated since Russia invaded Ukraine. With the market plumbing thus far proving sufficiently robust to accommodate wilder price swings accompanying risk transfers, even the relatively humdrum world of government debt is having to adapt. Specifically, the euro zone’s guardians of monetary stability, led by the European Central Bank, are having to intervene to reduce friction in their capital markets. It should be a wake-up call that liquidity can’t be taken for granted.
BANK OF CANADA RAISES INTEREST RATE TO 0.5 PER CENT, PUSHING BORROWING COSTS UP FOR FIRST TIME SINCE 2018
G&M - Mark Rendell (2022-03-03)
The Bank of Canada has raised its policy interest rate, pushing up borrowing costs for the first time since 2018 and kicking off a series of rate hikes despite heightened economic uncertainty caused by Russia’s invasion of Ukraine.
POWELL BACKS 25-BASIS-POINT INTEREST RATE HIKE THIS MONTH, SAYS FED READY TO BE MORE AGGRESSIVE
G&M - HOWARD SCHNEIDER AND LINDSAY DUNSMUIR (2022-03-02)
Federal Reserve Chair Jerome Powell said on Wednesday he would support a 25-basis-point interest rate hike at the U.S. central bank’s March 15-16 policy meeting and would be “prepared to move more aggressively” if inflation does not abate as fast as expected.
RUSSIA TO TEMPORARILY BAN FOREIGNERS FROM SELLING ASSETS
Staff - Staff (2022-03-01)
"In the current sanction situation foreign entrepreneurs are forced to be guided, not by economic factors, but to make decisions under political pressure," Prime Minister Mikhail Mishustin told a governmental meeting.
RUSSIA-UKRAINE WAR IS 'A FINANCIAL WAR NOW'
Yahoo Finance - Brian Sozzi (2022-02-28)
Russia's central bank reserves have effectively been frozen amid the decision, notes Reid. The country had about $630 billion of foreign reserves, a majority of which likely resides directly with G10 banks and central banks, says Reid.
HOSTILITY TO RESOURCES COMES HOME TO ROOST AT TRANS MOUNTAIN
FP - Joe Oliver (2022-02-28)
Last week, as the world watched police restore public order in downtown Ottawa, the federal government’s hostility to resource development was dealt a huge financial blow that may in the end land-lock Canada’s immense oil reserves. Trans Mountain Corp. (TMC) announced that total costs for its pipeline expansion have ballooned 70 per cent to an eye-watering $21.4 billion, up from the latest estimate of $12.6 billion, and almost triple the initial estimate $7.4 billion. And, no surprise, the project’s projected completion was extended to the third quarter of 2023.
BIGGEST RUSSIAN BANKS COULD BE TARGETED AS WEST PREPARES SEVERE SANCTIONS OVER UKRAINE INVASION
FP - Owen Walker in London and Max Seddon in Moscow (2022-02-25)
The sanctions already put in place over the past week took aim at smaller banks, a handful of oligarchs, the Nord Stream 2 gas pipeline and the trading of Russia’s sovereign debt. But experts say that to really squeeze Putin, the West needs to take aim at the country’s biggest banks.
POZSAR SAYS $300 BILLION RUSSIA CASH PILE CAN ROIL MONEY MARKETS
Bloomberg - Garfield Clinton Reynolds (2022-02-25)
Russia still has about $300 billion of foreign currency held offshore -- enough to disrupt money markets if it’s frozen by sanctions or moved suddenly to avoid them.
CENTRAL BANKS UNLIKELY TO CHANGE COURSE ON RATE HIKES DUE TO UKRAINE CONFLICT
Better Dwelling - Stephen Punwasi (2022-02-25)
The BoC is still forecast to hike interest rates next week, possibly with more reason. BMO reiterated they expect a full (25 bps) hike to the overnight rate at the March 2 meeting. At this time, the bank doesn’t see the crisis spilling over beyond Ukraine. If that occurs, it might need to be reviewed. The risk of uncertainty means the unlikely scenario of a 50 bps hike in Canada can be safely “put to bed.”
CHRYSTIA FREELAND, MINISTER OF EVERYTHING, HAS BIG PLANS FOR CANADA’S ECONOMIC FUTURE
G&M - Trevor Cole (2022-02-24)
Housing The federal government has an important role to play, working with municipalities and provinces, in increasing supply, including a mix of rental supply. I think now is the time for new energy in the building of co-ops. We also need to do things in terms of the financialization of housing. We need to see housing as homes for Canadian families and not a financial asset. I want to be very clear that our government has absolutely no intention of altering the position on capital gains on the principal residence of Canadians. That is a very important part of how Canadian society works. Where we need to be thoughtful is in foreign money flowing into Canadian housing and turning that into a financial asset. That’s not what Canadian houses are meant to be for.
OSC FLAGS EMERGENCIES ACT TWEETS BY KRAKEN, COINBASE CEOS TO RCMP
FP - Claire Brownell (2022-02-24)
Kristen Rose, the OSC’s manager of public affairs, said the regulator is “aware” of posts earlier this week from the Twitter accounts of Kraken CEO Jesse Powell and Coinbase CEO Brian Armstrong, which criticized the invocation of the Emergencies Act and advocated for the importance of non-custodial crypto wallets, with Armstrong promoting his own company’s such product. Non-custodial wallets are controlled directly by an individual rather than by a third party such as a cryptocurrency-trading platform, making it more difficult for law enforcement to freeze or seize the funds they hold.
CANADA’S OLDEST BANK SEES MUCH HIGHER INFLATION AS COMMODITY PRICES RISE
Better Dwelling - Daniel Wong (2022-02-23)
The CPI forecast is climbing more aggressively than the BoC expects. The central bank last forecast 4.2% annual growth for 2022, up from their previous forecast of 3.2% growth. Independent expectations are rising very quickly, as fewer people see monetary policy moving fast enough to cool inflation.
JPMORGAN NOW EXPECTS NINE STRAIGHT FED RATE INCREASES UNTIL MARCH 2023
Yahoo Finance - Evie Liu (2022-02-21)
Bank's economists warn of "a feedback loop taking hold between strong growth, cost pressures, and private sector behavior."
FINANCIAL INSTITUTIONS HAVE STARTED FREEZING PROTESTERS’ BANK ACCOUNTS BASED ON RCMP INFORMATION, CHRYSTIA FREELAND SAYS
G&M - James Bradshaw, Bill Curry (2022-02-18)
Deputy Prime Minister Chrystia Freeland said financial institutions have started freezing bank accounts belonging to protesters involved in blockades based on information from the RCMP, and predicted the number of accounts being targeted will rise in the coming days.
BANKS GET OTTAWA PROTESTERS' NAMES AS FINANCIAL CRACKDOWN GETS UNDERWAY
FP - Kevin Orland and Brian Platt (2022-02-18)
The Canadian Bankers Association confirmed the Royal Canadian Mounted Police has provided a list to the banks. The banks are still seeking clarity from law enforcement on how to handle the alleged protesters’ accounts, according to people familiar with the matter. But Finance Minister Chrystia Freeland said some accounts have already been frozen.
CANADIAN INFLATION PRESSURE IS BROADENING ACROSS CATEGORIES AS IT HITS 3 DECADE HIGH
Better Dwelling - Daniel Wong (2022-02-17)
Canadian inflation didn’t hear your transitory call apparently — it’s widening to other categories. Statistics Canada (Stat Can) data shows the consumer price index (CPI) soared in January. The annual growth rate reached 5.1% for the month, advancing from 4.8% a month before. Canada’s inflation hasn’t grown this fast since September 1991, three decades ago. To make things worse, high inflation is being felt across categories, making it harder to slow down.
NAVIGATING UNCHARTED TERRITORY
BOC - Timothy Lane (2022-02-16)
Deputy Governor Tim Lane discusses how the Bank of Canada approached decision making during the unprecedented upheaval brought on by the COVIDâ19 pandemic.
WHAT IS CANADA’S FEDERAL EMERGENCIES ACT? A SUMMARY OF THE LAW’S POWERS AND USES
G&M - ABIGALE SUBDHAN AND SAMANTHA EDWARDS (2022-02-15)
On Feb. 14, Prime Minister Justin Trudeau announced the federal government is invoking the Emergencies Act to address the blockades taking place to protest pandemic restrictions, the first time the act has been triggered in Canada.
FED OFFICIALS AGREE ON A MARCH RATE HIKE BUT LITTLE ELSE
Investment Executive - Christopher Rugaber (2022-02-15)
James Bullard, president of the Federal Reserve Bank of St. Louis, on Monday reiterated his call for the Fed to take the aggressive step of raising its benchmark short-term rate by a full percentage point by July 1. Esther George, president of the Kansas City Fed, expressed support for a more “gradual” approach. And Mary Daly of the San Francisco Fed declined to commit herself to more than a modest rate hike next month.
BANKS GET EMERGENCY POWERS TO FREEZE ACCOUNTS, HALT FUNDS
G&M - James Bradshaw (2022-02-14)
Federal emergency act measures will expand the powers of Canada’s banks and financial intelligence agency to monitor and stem the flow of funds to protesters who have blocked downtown Ottawa and key corridors, as the federal government escalates its efforts to end the disruptions.
RAGING INFLATION FLIPS CURRENCY WARS INTO A RACE TO THE TOP
FP - Payne Lubbers (2022-02-11)
The way these battles conventionally work is this: a country tries to weaken its currency, to give it an advantage in global trade. It’s what President Donald Trump threatened to do with China, which he accused of intentionally devaluing the yuan.
RAGING INFLATION FLIPS CURRENCY WARS INTO A RACE TO THE TOP
FP - Payne Lubbers (2022-02-10)
But soaring inflation has changed priorities, since a stronger currency tends to help contain inflation by making imported goods cheaper. Strategists at TD Securities discussed the issue in a Wednesday note titled “Currency Wars in Reverse Got Markets in a Tizzy,” arguing that policy-makers now prefer strength because of the “inflationary impulse that has gripped markets over the past few quarters,” they wrote.
AT THE OLYMPICS, CHINA’S DIGITAL YUAN IS OFF TO A LESS-THAN-GOLDEN START
G&M - James Griffith (2022-02-08)
For 36 years, Visa has paid hundreds of millions of dollars to be an Olympic sponsor, ensuring its branding is all over stadiums and athletes, and that no one attending or watching the Games even thinks of Mastercard.
BANK OF AMERICA STRATEGISTS WARN FED HIKES IN PRICEY MARKET TO END POORLY
Yahoo Finance - Nikos Chrysoloras (2022-02-08)
While U.S. equities saw positive returns during previous periods of rate increases, the key risk this time round is that the Federal Reserve will be “tightening into an overvalued market,” the strategists led by Savita Subramanian wrote in a note.
FED JOINS CENTRAL BANKS AROUND THE WORLD IN RACE TO RAISE RATES
Yahoo Finance - Brian Cheung (2022-02-08)
“The Fed is no longer on the dovish end of the spectrum, but it is not very hawkish relative to its G10 counterparts either,” wrote BofA Securities’ economics team over the weekend.
GOODBYE EASY MONEY AS HAWKISH CENTRAL BANKS SPEED UP RATE HIKES
Bloomberg - Simon Kennedy (2022-02-07)
Two years after the pandemic sent the global economy into a deep but short recession, central bankers are withdrawing their emergency support -- and they’re moving faster than they or most investors had foreseen.
CANDICE BERGEN VOTED INTERIM CONSERVATIVE LEADER AFTER CAUCUS OUSTS O'TOOLE
CBC - John Paul Tasker, Nick Boisvert (2022-02-03)
Candice Bergen was voted interim leader of the Conservatives on Wednesday evening after a majority of party MPs voted to remove Erin O'Toole as leader earlier in the day.
BANK OF CANADA GOVERNOR SAYS IT'S UNCLEAR HOW QUICKLY INFLATION WILL DROP
FP - Reuters (2022-02-03)
Macklem, speaking to the Senate banking committee, reiterated that interest rates would have to start going up this year to tackle inflation, which is currently 4.8 per cent, more than double the central bank’s 2 per cent target.
DON'T MAKE REGULATORS CHEERLEADERS FOR FINANCE, UK CAMPAIGN GROUPS SAY
Reuters - Huw Jones (2022-02-03)
Britain must ditch plans to make regulators "cheerleaders" for global finance and instead focus on promoting financial inclusion at home, consumer campaign groups said on Friday.
THE BANK OF CANADA IS ON THE CUSP OF SHEDDING BONDS FROM ITS BALANCE SHEET
G&M - DAVID PARKINSON (2022-02-01)
The Bank of Canada’s maiden voyage into quantitative easing is coming to an end. Now we’re about to find out what the return trip – quantitative tightening – looks like.
BANK OF CANADA’S GOVERNOR TIFF MACKLEM WOULD LIKE YOU TO KNOW THAT HE DOESN’T LIKE INFLATION
G&M - Mark Rendell (2022-01-31)
The Governor of the Bank of Canada spent the best part of two years promising to keep interest rates as low as they could go, even in the face of surging inflation. This week, he blinked, declaring an end to the emergency phase of monetary policy, and putting Canadians on notice that borrowing costs are going up, and soon.
BOE HAS MORE THAN RATE HIKES TO WORRY ABOUT
Bloomberg - Marcus Ashworth (2022-01-31)
In 2016, the Bank of England took a stab at estimating the interest-rate equivalent of its bond-buying program: The thinking then was that 60 billion pounds ($80 billion) of asset purchases were comparable to a Bank Rate cut of about 50 basis points.
EIGHT-MONTH DEFICIT: FEDS SPENT $73.7 BILLION MORE THAN THEY TOOK IN
Investment Executive - CP (2022-01-31)
The federal government ran a budget deficit of $73.7 billion for the April to November period of the current fiscal year.
DON’T MISREAD THE BANK OF CANADA’S DECISION AS INACTION. INTEREST RATES WILL RISE, AND QUICKLY
G&M - DAVID PARKINSON (2022-01-27)
First, the obvious: The bank came right out and said that it plans to raise rates very soon – and that Wednesday’s announcement was, basically, clearing the tracks in preparation. This isn’t something central banks typically do. In this case, Bank of Canada Governor Tiff Macklem underlined the point in his post-announcement news conference. He wanted to make sure no one missed it. The bluntness had a certain “don’t say we didn’t warn you” feel to it.
BOC HOLDS RATES, BUT RISING PATH STILL IN PLAY
FP - Larysa Harapyn (2022-01-27)
Josh Nye, Senior Economist with RBC, talks with Financial Post’s Larysa Harapyn about the Bank of Canada’s decision to hold on interest rates, but signaled increases are coming.
BANK OF CANADA SEEN AS BEHIND THE CURVE AFTER RATE SURPRISE
Bloomberg - Erik Hertzberg and Theophilos Argitis (2022-01-27)
His own analysts presented him with evidence the economy is on the cusp of overheating and made a clear-cut economic case to hike immediately. But Macklem had told Canadians and investors they’d get a heads up before increasing rates. A move Wednesday could have been seen as a betrayal of that promise.
THE BANK OF CANADA DIDN’T RAISE RATES, IT RAISED ITS INFLATION FORECAST
Better Dwelling - Stephen Punwasi (2022-01-27)
Instead of raising rates to cool inflation, Canada’s central bank raised its inflation forecast. The BoC CPI estimate reached 4.2% for 2022, which is a notable jump from the 3.4% previously expected. It’s also more than double the target rate of 2% they should have been working towards. The central bank recently found out most businesses no longer believe the BoC can control the monetary supply. This presents a significant concern when attracting investment to Canada.
TRUDEAU FOE WOOS GOVERNORS TO HELP UNDO TRUCKER SHOT RULE
Bloomberg - Jen Skerritt, Kim Chipman, and Allison Smith (2022-01-26)
Alberta Premier Jason Kenney said he’s working with U.S. governors to lobby President Joe Biden and Canadian Prime Minister Justin Trudeau for an end to trucker vaccine mandates that are disrupting shipments across the border.
HOW HIGH WILL THE BANK OF CANADA HIKE RATES? WE ASKED THE COUNTRY’S TOP EXPERTS
Better Dwelling (2022-01-26)
A “dot plot” of forecasts for the Bank of Canada overnight rate after each rate announcement, demonstrating sentiment distribution.
BANK OF CANADA MAINTAINS POLICY RATE, REMOVES EXCEPTIONAL FORWARD GUIDANCE
BOC - BOC (2022-01-26)
The Bank of Canada today held its target for the overnight rate at the effective lower bound of ¼ %, with the Bank Rate at ½ % and the deposit rate at ¼ %. With overall economic slack now absorbed, the Bank has removed its exceptional forward guidance on its policy interest rate. The Bank is continuing its reinvestment phase, keeping its overall holdings of Government of Canada bonds roughly constant.
STIMULATING THE ECONOMY WAS EASY. TAMING INFLATION WILL BE MUCH TRICKIER.
G&M - KONRAD YAKABUSKI (2022-01-24)
If you’ve been in the market for a new refrigerator in recent weeks, you’re likely still suffering from sticker shock. Fridge prices were up almost 14 per cent in December, as Canada’s overall inflation rate hit a 30-year high of 4.8 per cent. Everything is suddenly costing more, from that fridge and the groceries you put in it (up 5.7 per cent) to a new car (7.2 per cent more) and the gas (33 per cent) it likely runs on. From home insurance (9.3 per cent) to shelter costs (5.4 per cent), Canadians are forking out more and more of their income just to cover the basics.
EU SHOULD BAN ENERGY-INTENSIVE MODE OF CRYPTO MINING, REGULATOR SAYS
FP - Eva Szalay (2022-01-24)
Thedéen said that European regulators should consider banning a mining method known as “proof of work” and instead nudge the industry towards the less energy-intensive “proof of stake” model to cut down on the sector’s vast power usage.
DEBT-STRAPPED CANADIANS BRACE FOR A RISKY RATE-HIKING CYCLE
Bloomberg - Theophilos Argitis and Erik Hertzberg (2022-01-24)
As early as next week, the Bank of Canada will start a campaign of tighter monetary policy that will test the country’s debt-laden consumers and reveal whether its robust economic recovery has staying power.
CENTRAL BANKS FACE A MOMENT OF TRUTH ON CRYPTO
Bloomberg - Lionel Laurent (2022-01-20)
The head of the Bank for International Settlements, Agustin Carstens, recently set out a dark vision for our financial future, quoting Goethe’s “Faust” and claiming that the “soul” of money was at stake.
ECB HAS EVERY REASON NOT TO ACT AS QUICKLY AS FED, LAGARDE SAYS
Bloomberg - Alexander Weber and William Horobin (2022-01-20)
“We’re all in very different situations,” Lagarde told the France Inter radio station Thursday in an interview. Inflation is “clearly weaker” in the euro area, while the region’s economic recovery is also not as advanced as in the U.S., she said.
UKRAINE’S PRESIDENT REBUKES BIDEN FOR SUGGESTION OF ‘MINOR’ RUSSIAN ATTACK
FT - Guy Chazan, Roman Olearchyk, James Politi (2022-01-20)
Ukraine’s president Volodymyr Zelensky has hit back at Joe Biden’s suggestion that a “minor incursion” by Russian forces into Ukraine might not prompt the severe response the west has threatened — a remark that has alarmed allies of the US.
FED OPENS DEBATE OVER POSSIBLE DIGITAL CURRENCY
FT - James Politi and Colby Smith (2022-01-20)
After months of anticipation, the Fed on Thursday released a lengthy discussion paper that will serve as the basis of what is expected to be a heated and consequential debate at the heart of the central bank in the coming months — though it made clear it did not “favour any policy outcome” at this point.
CENTRAL BANKS MUST REDUCE THEIR BALANCE SHEETS MORE AGGRESSIVELY
FT - Kristin Forbes (2022-01-20)
Central banks do not hesitate to expand their balance sheets when a crisis hits.
WHY IS IT CANADA'S 'DUTY' TO DESTROY ITS ECONOMY AND CONFEDERATION IN THE PURSUIT OF NET ZERO?
National Post - Rex Murphy (2022-01-20)
A subsidiary question is: Does the government of a Confederation have the right, the legislative competence to declare the central industry of one of the provinces within that Confederation outmoded? And on that premise make it a national policy to destroy the economic well-being of that province?
MAKING BANK AND RIDING THE BUS: WHAT CANADIAN PRIME MINISTERS GET UP TO AFTER RETIREMENT
National Post - Tristin Hopper (2022-01-20)
In 2017, Joe Clark made an appearance in Atlanta alongside former U.S. President Jimmy Carter. It was a fitting meeting, as both men were cursed to spend the majority of their lives recovering from a brief and ultimately unsuccessful flirtation with absolute power. It’s now been 43 years since Clark’s nine-month stay in government — easily granting Clark Canadian history’s longest tenure as an ex-prime minister.
OVER 1 IN 5 CANADIAN DOLLARS CREATED DIDN’T EXIST TWO YEARS AGO
Better Dwelling - Stephen Punwasi (2022-01-19)
Canada’s central bank has been going Brrr, and it’s not because of the frigid winters in Ottawa. Bank of Canada (BoC) data shows that the money supply is still expanding rapidly in October. The M2++ money supply hit peak annual growth last year, reaching the highest level since the 1980s. The latest numbers show over 1 in 5 Canadian dollars today, didn’t exist prior to 2020. Traditionally the expansion of the money supply precedes inflation. That explains a lot.
ECONOMISTS SAY BANK OF CANADA TO BEGIN HIKING RATES NEXT WEEK
Bloomberg - Erik Hertzberg (2022-01-18)
Economists at TD Securities and Laurentian Bank said Monday the Bank of Canada will start a hiking cycle at its policy decision on Jan. 26. Bank of Montreal brought forward its call on the first increase to March from April, while Bank of Nova Scotia said the central bank “cannot afford” to wait any longer.
BANK OF CANADA POLICY IS “TOO LOOSE,” RATE HIKES WILL REDUCE REAL ESTATE FROTH: BMO
Better Dwelling - Daniel Wong (2022-01-18)
Canada’s central bank has been tight-lipped about its next moves. The Bank of Canada last told the public that April would be the earliest they’ll be raising rates. That was back when they said inflation was transitory though. Since then, the US has dismissed the transitory narrative and Canada’s central bank has been quiet.
FINANCIAL SECTOR FACES CLIMATE TRANSITION RISK, SAYS BOC AND BANKING REGULATOR
G&M - MARK RENDELL AND JEFFREY JONES (2022-01-17)
Canada’s long-term economic growth and the stability of its financial system could be put at risk if the country delays implementing policies to deal with the transition to a low-carbon world, the central bank and the banking regulator say in a report analyzing a range of possible climate scenarios.
The Bank of Canada and the Office of the Superintendent of Financial Institutions examined the balance sheets of Royal Bank of Canada
TRADERS FACE RISKS WITH BETS BANK OF CANADA WILL OUTDO FED ON HIKES
Bloomberg - Payne Lubbers and Edward Bolingbroke (2022-01-14)
Traders have boosted expectations for the pace of central bank rate hikes in Canada even more than in the U.S., provoking questions about whether the market might have gone too far, too fast.
WHY CENTRAL BANKS ARE KEY TO GLOBAL ECONOMIES IN 2022
Bloomberg - Video (2022-01-14)
As the coronavirus pandemic rages on for a third year, Bloomberg’s Stephanie Flanders explains on “Quicktake Stock” why Covid-19 will take a back seat to central banks as a driver for global economies this year.
USING SCENARIO ANALYSIS TO ASSESS CLIMATE TRANSITION RISK
OSFI - OSFI (2022-01-14)
The Bank of Canada and the Office of the Superintendent of Financial Institutions (OSFI) completed their climate scenario analysis pilot in collaboration with six Canadian federally regulated financial institutions.
POWELL MAKES CASE FOR FED CURBING INFLATION WHILE DOING NO HARM
Bloomberg - Rich Miller and Craig Torres (2022-01-12)
Federal Reserve Chair Jerome Powell sought to reassure lawmakers and investors on Tuesday that the central bank can pull off the tricky task of bringing down four-decade high inflation without damaging the U.S. economy.
THE GREENING OF THE FEDERAL RESERVE
WSJ - Editorial Board (2022-01-12)
Jerome Powell faced the Senate Banking Committee at his confirmation hearing for a second term at the Federal Reserve on Tuesday, and it’s a sign of the progressive times that a leading issue was the greening of the central bank. Not green as in money, but as in climate regulation.
FINAL REPORT OF THE BOC-OSFI CLIMATE SCENARIO ANALYSIS PILOT
BOC - BOC (2022-01-12)
On Friday, January 14, 2022, the Bank of Canada and the Office of the Superintendent of Financial Institutions (OSFI) will publish the Final Report of the BoC-OSFI Climate Scenario Analysis Pilot.
BANK REGULATOR MULLS HIGHER CAPITAL REQUIREMENTS FOR BANKS AS CUSHION AGAINST CLIMATE CHANGE RISKS
G&M - James Bradshaw (2022-01-11)
Canada’s banking regulator could raise capital requirements for banks in the coming years to build up new buffers against risks from climate change and the challenging transition to a greener economy.
Peter Routledge, who leads the Office of the Superintendent of Financial Institutions (OSFI), said at a virtual conference held by Royal Bank of Canada on Wednesday that the regulator “will expect federally regulated financial institutions to build up their capital buffers in the 2020s.”
New capital buffers would be designed to guard against potentially higher volatility and risks to the financial sector as action to combat climate change ramps up, and especially if some of the tougher measures are put off past 2030.
After OSFI lifted those restrictions in November, with Mr. Routledge urging banks to “act responsibly” with their surplus capital, the six largest banks announced dividend increases of 10 per cent to 25 per cent, and plans to buy back 2 per cent to 3.5 per cent of their shares. And in late December, Bank of Montreal
struck a $20.9-billion deal to buy California-based Bank of the West, cancelling its plans to buy back shares.
CANADA HAS COMMITTED TO HALT FINANCING TO THE OIL AND GAS INDUSTRY. TO UNDERSTAND WHAT THAT REALLY MEANS, WATCH FOR THE FINE PRINT
G&M - Matthew McClearn (2022-01-10)
Of all the recipients of Canadian government support in recent years, Petroleos Mexicanos (Pemex) ranks among the strangest. Export Development Canada, a Crown corporation, provided 19 loans to Mexico’s state-owned oil company over 15 years, totalling somewhere between $3-billion and $5.7-billion (EDC only discloses ranges, not precise amounts). The Indian Oil Company received somewhere between $190-million and $425-million. Petrobras, Brazil’s state-owned oil company, got at least $1-billion.
LATEST EMPLOYMENT NUMBERS POSITIVE, BUT ‘A LITTLE BIT STALE’
Investment Executive - Greg Mechbach (2022-01-10)
Canada’s unemployment rate was 5.9% in December, down from 6% in November and 7.1% in August, Statistics Canada reported Friday.
U.S. FEDERAL RESERVE MAY NEED TO HIKE RATES FASTER, REDUCE BALANCE SHEET QUICKLY, MINUTES SHOW
G&M - Howard Schneider (2022-01-06)
Federal Reserve officials said last month that the U.S. labour market was “very tight” and might need the U.S. central bank not just to raise interest rates sooner than expected but also reduce its overall asset holdings to tame high inflation, according to minutes of their Dec. 14-15 policy meeting.
FEDERAL DOCUMENTS HINT AT SWEEPING ECONOMIC IMPACT FROM CENTRAL BANK ‘DIGITAL LOONIE’
Investment Executive - Jordan Press (2022-01-05)
In one briefing note from last January, officials warned Finance Minister Chrystia Freeland that the issuance of a central bank digital currency would entail “wide-reaching implications for the economy, the financial system” and the Bank of Canada’s operations.
CPP PREMIUMS SET TO RISE IN JANUARY, A BIGGER JUMP THAN PLANNED
CBC - CP (2022-01-03)
The increase is part of a multi-year plan approved by provinces and the federal government five years ago to boost retirement benefits through the public plan by increasing contributions over time. The increases started in 2019.
A NEW YEAR AND NEW HIKE TO CPP PREMIUMS— THE LARGEST IN THREE DECADES — TO HIT CANADIANS
National Post - National Post (2022-01-02)
In the case of CPP, maximum contributions by employees and employers will be $3,499.80 in 2022, up from $3,166. For self-employed Canadians, the maximum amount will be $6,999, up from $6,332.
BANK OF CANADA’S MONETARY POLICY DIRECTION IN 2022 COULD DEPEND ON THE PUBLIC’S INFLATION EXPECTATIONS
G&M - Mark Rendell (2021-12-28)
Bank of Canada officials spent much of 2021 assuring people that this period of high inflation would be relatively short-lived. The shape of monetary policy next year could depend to a significant degree on whether Canadians continue to believe this narrative.
WHO WILL GET THE FED REGULATION JOB? HERE ARE SOME OF THE CONTENDERS
Reuters - Pete Schroeder and Michelle Price (2021-12-28)
Speculation over who will get the role is once again ramping up, after the Wall Street Journal on Tuesday reported that the White House was considering Sarah Bloom Raskin, a former Fed governor and former Treasury Department official, for the position.
CENTRAL BANKS HAVE BLINKED ON INFLATION, IN RACE TO AVERT THE SECOND ROUND
G&M - DAVID PARKINSON (2021-12-21)
Last week may go down as the moment the world’s central bankers lost their staring contest with inflation.
FEDERAL GOVERNMENT DEPOSITED NEARLY $26 MILLION IN THE WRONG BANK ACCOUNTS LAST YEAR
CBC - Elizabeth Thompson (2021-12-21)
The federal government deposited nearly $26 million into the wrong bank accounts during the last fiscal year — and more than $10 million of it may be gone for good.
BANK OF CANADA FILLS IN MANDATE BLANKS AMID INFLATION DISCOMFORT
Bloomberg - Shelly Hagan, Erik Hertzberg (2021-12-16)
Governor Tiff Macklem underscored that price stability is central to the Bank of Canada’s renewed mandate and indicated that any new flexibility will apply only at times when inflation is low or the economy is weak.
US FEDERAL RESERVE DOUBLES THE PACE OF TAPERING, RBC FORECASTS EARLIER RATE HIKES
Better Dwelling - Daniel Wong (2021-12-16)
The Fed held rates but will double the speed it tapers its bond-buying, a sign easy credit will come to an end. The Fed will lower its Treasury purchases by another US$20 billion next month. Mortgage backed securities purchases will also fall by US$10 billion. At this pace, the program should be over by mid-March. Before this announcement, RBC didn’t see the program ending until mid-2022.
OTTAWA’S ‘FISCAL GUARDRAILS’ ON DEBT LEVELS HAVE SUDDENLY GONE AWOL
G&M - Patrick Brethour (2021-12-15)
In November, 2020, Finance Minister Chrystia Freeland sidled past demands for a fiscal anchor, such as setting a target level for Canada’s debt burden, to limit the growth in the federal government’s spending and debt. Instead, she announced, the government would adopt “fiscal guardrails,” broader economic measures that would guide decisions on $100-billion of stimulus spending over three years.
FED SEEN DELIVERING ONE OF THE MOST HAWKISH PIVOTS IN YEARS
Bloomberg - Steve Matthews and Sarina Yoo (2021-12-15)
More than half predict the Fed’s quarterly forecasts, released after the conclusion of its two-day meeting Wednesday, will show the median of 18 officials projecting two rate hikes next year from current levels near zero.
THE PRICE OF THE FED’S DELAY
WSJ - Editorial Board (2021-12-15)
The Federal Open Market Committee (FOMC) is meeting this week, and its members were greeted Tuesday with the rude welcome of surging wholesale prices. This is more evidence that Chairman Jerome Powell and the Federal Reserve have made a historic mistake that they now have to fix without sending the economy into recession.
THE BOC IS WAITING FOR FULL EMPLOYMENT TO RAISE RATES. BANKS SAY CANADA IS PAST THAT
Better Dwelling - Daniel Wong (2021-12-15)
BMO chief economist Douglas Porter said, “mission accomplished” because they already hit full employment. His analysis shows prime-aged (15-64) workers’ employment rate is at a record high. The rate is “easily” past pre-pandemic levels. At the start of 2020, the Canadian economy was also considered robust. By no measure is this a weak employment market.
FED TO ACCELERATE WITHDRAWAL OF ECONOMIC AID AS PRICES SURGE
Investment Executive - Christopher Rugaber (2021-12-15)
On Wednesday, the Fed will likely announce that it will reduce its monthly bond purchases at twice the rate that Powell had outlined just six weeks ago. Those bond purchases are intended to lower longer-term rates, so winding them down more quickly — likely by early spring — will lessen some of the economic aid the Fed supplied after the pandemic erupted last year.
BANK OF CANADA’S NEW MANDATE COMES WITH ONE WRINKLE: POLITICS
G&M - DAVID PARKINSON (2021-12-14)
The renewal of the Bank of Canada’s mandate agreement with the federal government grants the central bank a five-year licence to, largely, continue doing what it has already been doing.
MICHAEL SABIA WAS GREETED AS A GAME CHANGER AS CANADA’S DEPUTY FINANCE MINISTER. A YEAR LATER, HE HAS MADE LITTLE HEADWAY
G&M - Robert Fife, Steven Chase (2021-12-14)
Michael Sabia spent decades helming major Canadian companies before the Liberal government recruited him to be deputy minister of the federal Department of Finance in late 2020. He accepted the job, he said at the time, in order to drive an economic-growth agenda in Ottawa.
BANK OF CANADA RENEWS 2-PER-CENT INFLATION TARGET, EMPHASIZES MAXIMUM EMPLOYMENT
G&M - Mark Rendell (2021-12-14)
The federal government has directed the Bank of Canada to put more emphasis on full employment as it aims to keep inflation low and stable. It is the most significant change to the central bank’s mandate in three decades, and reflects evolving ideas about the nature of the economy and monetary policy.
'TRANSITORY' WAS THE WORST INFLATION CALL IN THE FEDERAL RESERVE'S HISTORY, SAYS MOHAMED EL-ERIAN
FP - Eric Martin (2021-12-14)
“The characterization of inflation as transitory — it’s probably the worst inflation call in the history of the Federal Reserve,” El-Erian said on CBS’s “Face the Nation” on Sunday.
JOINT STATEMENT ON CRYPTO-ASSET POLICY SPRINT INITIATIVE AND NEXT STEPS
RealVision - Office of the Comptroller of Currency (2021-12-13)
A wave of de-banking may be coming to crypto and fintech over the coming 12 months. Regulators conducted a series of interagency "policy sprints" focused on crypto assets. They recently issued a joint statement with a roadmap of the agencies' plans to clarify throughout 2022 whether certain activities are "legally permissible." Paul Atkins, CEO & Founder of Patomak Global Partners and former SEC Commissioner, joins Real Vision in this exclusive interview to break down what this letter could mean for the banking organizations. Interviewed by Maggie Lake on December 11, 2021. Check out the joint statement from the Federal Reserve, FDIC, and OCC here: https://bit.ly/3ytNTRF
A SWIFT ROUTE TO ECONOMIC RUIN
G&M - Eric Reguly (2021-12-12)
Thank God for financial globalization, the Americans must be thinking. The Russian financial system is no longer an island, as it was in the Soviet era. But it can effectively be turned back into one, just like that – by flicking a switch.
CHRYSTIA FREELAND TO ANNOUNCE BANK OF CANADA’S RENEWED MANDATE ON MONDAY
G&M - Mark Rendell (2021-12-12)
Finance Minister Chrystia Freeland will announce the Bank of Canada’s new mandate on Monday in a long-awaited decision that is expected to keep the central bank’s inflation target at 2 per cent while adding new language about how it should factor in employment when setting interest rates.
BRACE FOR IMPACT: RATE HIKES ARE COMING
G&M - William Robson (2021-12-12)
Bank of Canada governor Tiff Macklem, like U.S. Fed chairman Jerome Powell, is clearly starting to view continuing high inflation with concern. A change is coming in monetary policy. With demand outrunning supply, our central banks’ policy interest rates need to rise – and may rise a lot.
CHRYSTIA FREELAND EXPECTED TO RENEW BANK OF CANADA’S 2 PER CENT INFLATION TARGET
G&M - BILL CURRY AND MARK RENDELL (2021-12-10)
Economists expect Finance Minister Chrystia Freeland to renew the Bank of Canada’s mandate of aiming its monetary policy at keeping inflation around 2 per cent, and to add new guidance to consider employment levels when it makes its decisions, but stop short of a dual mandate.
BANK OF CANADA WORRIED SUPPLY CHAIN DISRUPTIONS WILL PERSIST, STOKING INFLATION FOR LONGER
FP - Shelly Hagan (2021-12-10)
While reiterating that officials expect these constraints to eventually ease along with inflation next year, Gravelle emphasized there’s a lot of uncertainty around that outlook. In January, the central bank will reassess whether bottlenecks and shortages are impacting the economy’s ability to grow without fuelling inflation.
BANK OF CANADA HOLDS ON INTEREST RATES, STILL SEES HIKES IN MIDDLE QUARTERS OF NEXT YEAR
G&M - Mark Rendell (2021-12-09)
The Bank of Canada left monetary policy unchanged Wednesday in a stand-pat interest-rate decision that highlighted stubbornly high inflation and accelerating wage growth while pointing to economic uncertainty tied to the Omicron variant of COVID-19.
A BIG BANK SENT TRADERS A CHRISTMAS POEM ABOUT THE BANK OF CANADA’S INACTION
Better Dwelling - Stephen Punwasi (2021-12-09)
The poem isn’t overly critical of Good Guv’nor Macklem but doesn’t portray him as a man of the public. It starts with ignoring the issues they’re meant to prioritize, such as inflation and input costs. Then celebrates the gains stocks made due to “printing” and ignoring that the market sees rates this low as irresponsible. Circumstances that are a tragedy for the working and middle class, but great for the rich.
THE BANK OF CANADA HELD RATES AND DROPPED A FIB ABOUT BUYING GOVERNMENT BONDS
Better Dwelling - Stephen Punwasi (2021-12-09)
Canada’s central bank is holding rates, which shouldn’t have been a surprise. The BoC is keeping the 0.25% overnight rate and said they’ll continue executing its reinvestment plan. As of Nov 1, the BoC has promised to only buy Government of Canada (GoC) bonds to replace those rolling off its balance sheet. They said their holdings of GoC bonds are “roughly constant” this morning.
TIME FOR THE BANK OF CANADA TO MAKE A HARD CHOICE
FP - David Laidler (2021-12-08)
Consider the Bank of Canada, now caught in a trap of its own making. Its mandate, pending an imminent renewal, requires it to maintain inflation in a range around two per cent, but its “forward guidance,” issued incessantly for the past year, has promised to keep the overnight rate of interest at 0.25 per cent until the real economy has returned to “normal” — at a date that lately seems to have been creeping closer from its original value somewhere around the end of 2022. The Bank is stuck with two quantitative targets, one, an inflation target agreed with the government that is its ultimate policy goal, and the other, its own creation, its target for the overnight rate, which is its main policy instrument. And it doesn’t seem to have thought much about what to do if they proved incompatible, which they now have. So: how did the Bank get into this mess, and more important, how does it extract itself?
We shouldn’t criticise the authorities for rapid resort to strong and unconventional stimulus when COVID-19 struck last March. To continue with “inflation targeting as usual” in those circumstances would have been a bit like sticking to the rules of the Gold Standard in the summer of 1914. Nor should we really complain that the stimulus turned out to be a bit excessive — better too much than too little under the circumstances, surely? The Bank’s fault, which it has shared to varying degrees with the Fed, the European Central Bank and the Bank of England, lay in failing to appreciate sufficiently the inflationary risk inherent in its measures, and even more so, in issuing its forward interest-rate guidance with an unwarranted degree of certainty.
OSFI’S NEW GREEN GROUP A PLUS FOR CANADA
Investment Executive - James Langton (2021-12-07)
“We believe globally coordinated efforts on climate risk management help financial institutions understand the consequences of climate change for their business, support their efforts to develop important climate risk management capabilities and capitalize on opportunities presented by climate change,” it said.
AS IT EYES INFLATION, THE BANK OF CANADA MUST MIND THE FAST-CLOSING LABOUR GAP
G&M - DAVID PARKINSON (2021-12-06)
If you take your eyes off Canada’s rocket car of a labour market for a moment as it zooms up the recovery road, and look back far behind it, you’ll spot something petty important that it has left in its dust.
FREELAND TO RELEASE FALL FISCAL UPDATE JUST DAYS BEFORE BREAK
G&M - Bill Curry (2021-12-03)
Finance Minister Chrystia Freeland has set Dec. 14 as the release date for a fall fiscal update, which will be the first formal revision of the federal government’s economic forecast since the April budget.
WALL STREET ENDS LOWER AS TAPER ACCELERATION WORRIES PILE ONTO OMICRON ANGST
FP - Devik Jain (2021-12-01)
“The principal contributor to the decline in stock prices today is the Powell commentary, regarding the upcoming Fed meeting, about accelerating the tapering of their bond buying program, which obviously leads to the prospect that rate hikes come sooner next year,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
“That somewhat hawkish shift in tone caught the market flatfooted,” Luschini said.LIRA CRASH SPURS FIRST CENTRAL BANK INTERVENTION SINCE 2014
Bloomberg - Onur Ant and Asli Kandemir (2021-12-01)
The monetary authority said in a statement that it took action due to “unhealthy price formations” in the lira, which has been in freefall since President Recep Tayyip Erdogan renewed his push for lower interest rates.
FCA TO DOUBLE FEES CHARGED TO REGULATED FIRMS
Finextra - Finextra (2021-12-01)
The watchdog says the fee increase would better reflect the costs associated with the authorisation and supervision of 51,000 firms throughout the UK.
THE INDIGENOUS ECONOMY IN CANADA: PARTNERING TO PROMOTE
BOC - Lawrence Schembri (2021-12-01)
Role of BOC in inigenous economies described in power point.
FREELAND MUST TREAD CAREFULLY IN DEBATE ON BANK OF CANADA’S INFLATION MANDATE
G&M - DAVID PARKINSON (2021-11-30)
Or maybe Ms. Freeland was hinting that the government’s renewal of the Bank of Canada’s five-year mandate – the underlying principles that the bank applies when deciding on interest rates – will be a lot more this time around than the usual rubber-stamping of another five years of the bank’s long-standing 2-per-cent inflation target. Perhaps Ms. Freeland is prepared to step into the debate about the central bank’s monetary policy-setting framework in a way that no Canadian government has in decades.
FEDERAL DEFICIT HITS NEARLY $69B OVER FIRST HALF OF FISCAL YEAR
Investment Executive - CP (2021-11-29)
Program spending, excluding net actuarial losses, between April and September was $225 billion, a decline of about $83.9 billion, or 27.2% drop, from the $308.9 billion in the same period one year earlier.
TRUDEAU UNDER FIRE AFTER U.S. RAISES DUTY RATES ON CANADIAN SOFTWOOD PRODUCERS
G&M - Steven Chase, Brent Jang (2021-11-26)
Prime Minister Justin Trudeau’s government was criticized Thursday for its handling of Canadian-American relations in the wake of an announcement by the United States that it would double the rate of punitive duties on most softwood imports from Canada.
OPPOSITION GRILLS TRUDEAU ON INFLATION, HOUSING AS ECONOMIC ISSUES TOP PARLIAMENT AGENDA
G&M - MARIEKE WALSH AND MARK RENDELL (2021-11-25)
Mr. Trudeau was derided by Conservative Leader Erin O’Toole’s front bench on his grasp of the issues at stake for ordinary people, as deputy leader Candice Bergen challenged him to name the price of common goods such as bread and bacon and beans, and of surf boards – one of the Prime Minister’s favoured vacation activities.
LEADERSHIP SHAKE-UP TO TEST MEXICAN CENTRAL BANK AS INFLATION SOARS
Reuters - Anthony Esposito (2021-11-25)
Mexican President Andres Manuel Lopez Obrador's surprise shakeup of the nomination process for the Bank of Mexico's (Banxico) next chief has cast doubt over the bank's rate-tightening cycle as it battles to keep high inflation in check.
EMERGING PRUDENTIAL RISKS IN HOUSING
OSFI - Peter Routledge (2021-11-24)
Although the word “exuberant” characterizes the housing markets in many Canadian cities & towns since the fall of 2020, we at OSFI believe residential mortgage credit risk has risen only modestly. There remains a risk that residential mortgage credit conditions could deteriorate, but fortunately OSFI has leveraged several prudential tools to increase the margin of safety in that market. In this endeavour, our federal and provincial financial safety-net peers have contributed mightily. Nevertheless, we consider the current imbalance between housing demand and supply to be a material prudential risk, and all actors in the Canadian housing system must take actions if we are to lessen the risk.
REMARKS BY TIFF MACKLEM, GOVERNOR OF THE BANK OF CANADA, AND BY LAWRENCE SCHEMBRI, DEPUTY GOVERNOR
BOC - Tiff Macklem (2021-11-24)
On Monday, November 29, and Tuesday, November 30, 2021, the Bank of Canada will host the inaugural Symposium on Indigenous Economies, a joint conference of the Bank of Canada, the Tulo Centre of Indigenous Economics and the Reserve Bank of New Zealand. It is the first in a series of bi-annual events examining the unique economic issues facing Indigenous peoples. The Symposium seeks to build cultural awareness and foster inclusion, strengthen engagement with Indigenous communities and support economic and financial education for and about Indigenous people.
JAPANESE BANKS TO TEST DIGITAL CURRENCY
Finextra - Finextra (2021-11-24)
The digital currency will be backed by bank deposits and use a shared platform to accelerate fund transfers and settlement between companies. While there will be a shared platform, a separate "business process area" will mean that the currency can be programmed to meet different business needs of the participants.
BIDEN NOMINATES JEROME POWELL FOR A SECOND TERM AS FEDERAL RESERVE CHAIR
G&M - Christopher Rugaber (2021-11-22)
President Joe Biden announced Monday he’s nominating Jerome Powell for a second four-year term as Federal Reserve chair, endorsing Powell’s stewardship of the economy through a brutal pandemic recession in which the Fed’s ultralow rate policies helped bolster confidence and revitalize the job market.
POWELL, BRAINARD NOD TO INFLATION THREAT IN NOMINATION REMARKS
Reuters - Reuters (2021-11-22)
Federal Reserve Chair Jerome Powell and Fed Governor Lael Brainard on Monday both noted the corrosive impact high inflation is having on the U.S. economy and American families in what may be a signal that controlling the rapid pace of price increases is now the central bank's top priority.
JACK M. MINTZ: POLITICIANS BEWARE: DEFICITS EVENTUALLY BITE
FP - Jack M. Mintz (2021-11-19)
This is not as simple a matter as you might think. It depends on how deficits are dealt with in later years. When fiscal policy tightens, governments typically avoid raising taxes or cutting spending on the poor. If so, richer provinces like Alberta, Ontario and British Columbia will see a rise in transfers to other provinces. On the other hand, if the federal government splurges on policies that benefit the rich, such as electric cars or licensing restrictions, net transfers from wealthier provinces might well decline.
HOUSE SET TO APPROVE $2 TRILLION SOCIAL SPENDING AND CLIMATE BILL
WSJ - Andrew Duehren and Richard Rubin (2021-11-19)
The House was set to pass a roughly $2 trillion education, healthcare and climate package Friday, as Democrats corralled their slim majority to approve the centerpiece of President Biden’s economic agenda after months of wrangling.
CORPORATE DEBT ATTRACTS HEAVY FOREIGN INVESTMENT: STATSCAN
Investment Executive - James Langton (2021-11-19)
Through the first nine months of 2021, foreign investors bought $126.0-billion-worth of Canadian securities, up from $108.7 billion for the same period in 2020.
REMARKS BY NEVILLE HENDERSON - 2021 MORTGAGE INSURANCE AND P&C RISK MANAGEMENT SEMINAR
OSFI - Neville Henderson (2021-11-18)
COVID-19 has accelerated risks, which require accelerated responses to those risks from institutions and regulators. Even before the onset of the pandemic economic pressures due to extended period of low interest rates, uncertain and volatile business conditions, and growing exposures to non-financial risks were shaping the future of the insurance sector.
JAMEY HUBBS
OSFI - Superintendent Jamey Hubbs at the Canadian Regulatory Technology Association annual meeting (2021-11-18)
OSFI’s approach to digitalization is determined through our mandate. OSFI’s purpose as stated in the OSFI Act is “to ensure that financial institutions and pension plans are regulated by an office of the Government of Canada so as to contribute to public confidence in the Canadian financial system”. We see the potential to unlock greater value for Canadians who expect their regulators to temper, but not inhibit, innovations. Our approach is in finding that balance to foster financial stability and contribute to Canadians confidence in their financial system.
JPMORGAN ECONOMISTS NOW PREDICT FED TO RAISE RATES IN SEPTEMBER
Bloomberg - Simon Kennedy (2021-11-18)
JPMorgan Chase & Co. economists said they now expect the U.S. Federal Reserve to raise interest rates next September, becoming the latest on Wall Street to jettison a forecast for the central bank to stay on hold through 2022.
BOC DEPUTY GOVERNOR HIGHLIGHTS LABOUR MARKET UNCERTAINTY, COMPLICATING RATE HIKE TIMING
G&M - Mark Rendell (2021-11-17)
The Bank of Canada is grappling with labour market uncertainty as it tries to gauge the health of Canada’s economic recovery and estimate a timeline for interest rate hikes in the face of surging inflation, deputy governor Lawrence Schembri said Tuesday.
HOW MUCH GREEN PAIN WILL CANADIANS TOLERATE?
FP - Joe Oliver (2021-11-17)
COP26, supposedly humanity’s “last best chance,” struggled to yield even faint hope of keeping temperatures from rising 2 C, let alone 1.5 C. Even so, egged on by catastrophists and the mainstream media, Canadian politicians are adopting increasingly damaging climate policies. Should we be surprised that Canada’s delegation to COP26 was the world’s largest? Surprised, not so much. Appalled, definitely.
UK INFLATION LEAPS TO 10-YEAR HIGH, BOLSTERING RATE HIKE BETS
Reuters - Andy Bruce and William Schomberg (2021-11-17)
British inflation surged to a 10-year high last month as household energy bills rocketed, according to data on Wednesday that will bolster expectations that the Bank of England will raise interest rates next month.
LIBERALS’ NEW BANK TAX COULD BE IMPLEMENTED BY START OF 2022
G&M - James Bradshaw (2021-11-15)
Canada’s major banks are expecting larger tax bills in 2022 as a new surcharge on financial institutions’ profits over $1-billion could be pushed through by Ottawa as soon as the start of 2022.
BANK OF CANADA LIKELY TO ADD LABOUR-MARKET CONDITIONS TO INFLATION MANDATE, CIBC SAYS
FP - Shelly Hagan (2021-11-15)
Avery Shenfeld, chief economist at the Canadian Imperial Bank of Commerce, said Friday that he expects to see new language around the idea that achieving the central bank’s two per cent inflation target sustainably requires an economy near full employment.
ARE CANADIAN HOUSEHOLDS READY FOR HIGHER RATES?
Youtube - Video (2021-11-12)
CIBC Deputy Chief Economist Benjamin Tal speaks with Financial Post’s Larysa Harapyn about whether Canadian households are ready for higher rates.
POWELL OR BRAINARD? BIDEN WEIGHS HIS PICK FOR U.S. FED CHAIR
Reuters - Jeff Mason (2021-11-11)
President Joe Biden is still weighing whether to keep Jerome Powell as chair of the Federal Reserve for a second term or elevate Fed Governor Lael Brainard to the post, an administration official said on Wednesday.
'IF IT AIN'T BROKE, DON'T FIX IT': BOC SHOULDN'T CHANGE POLICY FRAMEWORK, ANALYSTS SAY
FP - Julie Gordon (2021-11-10)
The inflation target renewal, done jointly with the federal government every five years, is due by year-end and comes at a time when central banks around the world are grappling with how to manage an uneven rebound from the COVID-19 pandemic.
‘BITCOIN IS NOT A DIGITAL CURRENCY, PEOPLE DON’T SPEND IT’, BANK OF CANADA GOVERNOR SAYS
Finbold - Justinas Baltrusaltis (2021-11-09)
Bank of Canada Governor Tiff Macklem has reiterated that Bitcoin cannot be classified as a currency because it lacks attributes to be used in transactions.
CENTRAL BANKS WALKING AN INCREASINGLY FINE LINE
Investment Executive - James Langton (2021-11-09)
“But if inflation continues to surprise to the upside and hiring proves sluggish, expect the Fed to field more questions about whether it can continue to hold rates low until maximum employment is achieved,” the bank added.
BANKS CLEARED TO RAISE DIVIDENDS, HIKE EXECUTIVE PAY AFTER OSFI LIFTS RESTRICTIONS
FP - Barbara Shecter (2021-11-08)
Peter Routledge, head of the Office of the Superintendent of Financial Institutions, said Thursday that the measures “are no longer necessary” and that decisions about capital distribution belong with boards of directors and management of the financial institutions.
FED TO START TAPERING ASSET BUYS BY $15 BILLION LATER THIS MONTH
FP - Craig Torres (2021-11-04)
After reductions in November and December, “the committee judges that similar reductions in the pace of net asset purchases will likely be appropriate each month, but it is prepared to adjust the pace of purchases if warranted by changes in the economic outlook,” the U.S. central bank’s policy-setting Federal Open Market Committee said in a statement Wednesday following a two-day meeting.
RESERVE BANK OF AUSTRALIA ABANDONS KEY STIMULUS TOOL
WSJ - Stuart Condie (2021-11-02)
The RBA said it would stop using yield caps and abandoned a view that its benchmark interest rate won’t rise until 2024, joining other central banks that are tightening policy as inflation risks mount.
THE BANK OF CANADA MAY NEED 8 RATE HIKES TO COMBAT INFLATION: SCOTIABANK
Better Dwelling - Better Dwelling (2021-11-02)
The bank’s economists are calling a very sharp climb for Canadian interest rates. They have forecast an increase of 100 basis points (bps) in the second half of 2022. It would be followed by another increase of 100 bps in 2023. An overnight rate of 2.25% would be the highest Canadians have seen since 2008.
FEDERAL DEFICIT HITS $57 BILLION NEARING HALFWAY OF FISCAL YEAR
Investment Executive - CP (2021-11-01)
The federal government ran a deficit of more than $57 billion over the first five months of its fiscal year, about $114 billion less than the treasury pumped out during the same stretch one year earlier.
TREASURY PUSHES REVISED BANK ACCOUNT REPORTING PROPOSAL AS WAY TO CATCH RICH TAX CHEATS, BUT BANKS FIGHT BACK
Forbes - Ashlea Ebeling (2021-10-31)
Should tax cheats with unreported income pay their fair share of federal income taxes? That’s what’s at stake in the congressional tax compliance proposal that would reel in tax cheats by tracking bank account transfers. The proposal has riled industry players and stoked misinformation campaigns. Amid this backdrop, the Treasury Department issued a fact sheet today with details on a revised proposal to catch wealthy tax cheats, this time setting the bank account threshold at $10,000, up from $600, and providing an exemption for wage earners.
HERE’S WHY, ACTUALLY, THE IRS $600 BANK REPORTING PROPOSAL IS ENTIRELY REASONABLE
Forbes - Elizabeth Bauer (2021-10-31)
Over the last several days, we’ve seen the Outrage Machine in action over a new Treasury proposal to require banks to report to the IRS new information on U.S. bank accounts, in addition to the existing reporting of interest payments. This proposal, as described at CBS News (among, of course, many other sites) would require banks to report the gross annual inflows and outflows in bank accounts, ostensibly to catch high-income tax-dodgers. Because the threshold for reporting was set at $600, skeptics are, well, skeptical of the assertion that this change would only affect, as the Biden administration claims, those earning over $400,000 per year.
BOC LEANS ITS WEIGHT AGAINST INFLATION FEARS WITHOUT CHANGING ITS VIEW ABOUT TEMPORARY NATURE OF PRICE SPIKES
G&M - DAVID PARKINSON (2021-10-29)
The Bank of Canada has been staring inflation in the face for a while now. On Wednesday, it blinked.
BANK OF CANADA ENDS QE BOND BUYING PROGRAM, A SIGN THAT HIGHER RATES ARE COMING SOCIAL SHARING
CBC - Pete Evans (2021-10-28)
"The main forces pushing up prices — higher energy prices and pandemic-related supply bottlenecks — now appear to be stronger and more persistent than expected," the bank said, adding that it now thinks Canada's multi-year high inflation rate will go higher still — topping out at about five per cent, the bank said — before coming back down to the range of about two per cent next year.
TRUDEAU SHUFFLES CABINET
Investment Executive - Staff (2021-10-27)
Chrystia Freeland remains as deputy prime minister and minister of finance. Randy Boissonnault, one of two Liberal Alberta MPs, has been named associate minister of finance as well as minister of tourism.
Mona Fortier, who previously held the associate minister of finance role, will be president of the Treasury Board.
BANK OF CANADA ON THE CUSP OF CAPPING STIMULUS, PAVING THE WAY FOR RATE HIKES
FP - Shelly Hagan (2021-10-27)
Governor Tiff Macklem is expected to reduce weekly government bond purchases by one half on Wednesday to $1 billion (US$809 million). That will mark the fourth time over the past 12 months the central bank has rolled back a program that has poured hundreds of billions into the financial system since the start of the COVID-19 pandemic.
XI'S NOT THERE? COP26 HOPES DIM ON CHINESE LEADER'S LIKELY ABSENCE
Reuters - David Stanway (2021-10-26)
The leaders of most of the world's biggest greenhouse gas emitters gather in Glasgow from Sunday, aiming to thrash out plans and funds to tilt the planet towards clean energy. But the man running the biggest of them all likely won't be there.
AT WHAT POINT IS HIGHER INFLATION NO LONGER ‘TRANSITORY’?
G&M - Matt Lundy, David Parkinson (2021-10-26)
Earlier this month, a prominent U.S. economic think tank invited the Atlanta regional Federal Reserve president to deliver a speech on the outlook for inflation. He showed up with his Transitory Jar.
TIFF MACKLEM'S DASHBOARD: CHARTING ECONOMY'S EXIT FROM PANDEMIC PUZZLE
FP - Kevin Carmichael (2021-10-25)
Bank of Canada Governor Tiff Macklem has one objective: managing inflation, which the central bank defines as keeping the Consumer Price Index (CPI) advancing at an annual rate of about two per cent.
INVESTORS WATCHING FOR CLUES NEXT WEEK ABOUT MONETARY PATH
Investment Executive - Mark Burgess (2021-10-25)
The central bank is expected to maintain its overnight rate at 0.25% on Oct. 27 while reducing its weekly bond purchases of $2 billion.
DIGITAL MONEY IS AN OPPORTUNITY FOR CANADA – IF WE SEIZE IT
G&M - ROBERT FAY AND DAVID DODGE (2021-10-21)
Robert Fay is the managing director of digital economy at the Centre for International Governance Innovation. David Dodge is a former governor of the Bank of Canada and is senior adviser at Bennett Jones LLP.
FED PUTS ‘TOUGH’ INVESTMENT LIMITS ON TOP OFFICIALS IN BID TO STAUNCH SCANDAL
G&M - HOWARD SCHNEIDER AND ANN SAPHIR (2021-10-21)
The U.S. Federal Reserve on Thursday banned individual stock purchases by its top officials and unveiled a broad set of other restrictions on their investing activities, taking action roughly six weeks after reports of active trading by some U.S. central bank policy makers triggered an ethics uproar.
BANK OF CANADA NOT PLANNING TO LAUNCH DIGITAL CURRENCY, AT LEAST FOR NOW
Reuters - Reuters (2021-10-20)
“We haven’t made a decision to issue one yet because we basically don’t see a compelling need under current circumstances,” Bank of Canada Deputy Governor Timothy Lane told a virtual panel organized by a Washington think-tank.
BANK OF AMERICA’S CALIFORNIA PARTNERSHIP, LONG FLOURISHING, IS ROILED BY UNEMPLOYMENT FRAUD
WSJ - Ben Eisen and Christine Mai-Duc (2021-10-20)
Bank of America Corp. thought helping states such as California hand out unemployment benefits would be good business. Then millions of Americans lost their jobs at once.
THIS BOE IS MADE FOR HIKING AND THAT IS WHAT IT’LL DO
Bloomberg - Marcus Ashworth (2021-10-19)
With all the subtlety of a dropped hammer, Bank of England Governor Andrew Bailey dispelled what little doubt was left that U.K. interest rates would be raised before the end of this year. The central bank would “have to act” to reduce inflationary pressures, he declared at an online panel held on Sunday by the Group of 30, an organization of financiers and academics.
The whole gilt yield curve shifted higher Monday in reaction, with two-year yields at 0.75%, the highest since May 2019; 10-year yields have doubled over the past two months, making it the worst-performing major government bond market. U.K. money markets have priced in 50 basis points of rate hikes by year-end. It is overreaction, of course. But what else could the markets do as they bore witness to the previously super-dovish BOE’s road-to-Damascus conversion? The central bank had just until recently toyed with negative rates.
In the minds of most BOE policymakers, the debate whether inflation is transitory is over. Bailey’s remark makes clear that inflation is now flashing red because energy prices have soared, and those surges are expected to spill over into consumer behavior, business pricing and, ultimately, potential wage demands. The semantics of inflation is for the birds — and they are turning out to be hawks.
OFFSHORE HAVENS MAY BE STUNG BY GLOBAL TAX DEAL: MOODY’S
Investment Executive - James Langton (2021-10-19)
“If successfully implemented, the global minimum corporate tax rate will be mildly credit negative for sovereigns that have used tax policy as a key component of a broader competitiveness strategy to attract investment, such as Ireland, Hungary, and many Caribbean economies, which typically have corporate tax rates below 15%,” Moody’s said.
TRADERS INCREASINGLY DOUBT BANK OF CANADA'S RATE-HIKE TIMELINE
BNN - Erik Hertzberg (2021-10-19)
Bets in the overnight swaps market are increasingly tilting toward a move early next year, well ahead of the U.S. Federal Reserve. Traders have now priced in three hikes in Canada by the end of 2022, which would bring the policy rate to 1 per cent from the current 0.25 per cent.
DEMOCRATS SWARM VIRGINIA GOVERNOR RACE TO BLUNT EX-CARLYLE CEO
Bloomberg - Ryan Teague Beckwith (2021-10-18)
Democrats concerned by the tight race for Virginia governor are rushing to bolster Terry McAuliffe’s campaign in a state that could set the national momentum for the critical midterms and the 2024 presidential election.
TRUDEAU ANNOUNCES DATE FOR RECALL OF PARLIAMENT
Investment Executive - IE (2021-10-18)
Parliament will be recalled on Nov. 22 — just over two months after the snap election that returned the Liberals with a second consecutive minority.
BANK OF CANADA’S TIFF MACKLEM, BANK CEOS DIVERGE ON INFLATION OUTLOOK
G&M - Mark Rendell (2021-10-15)
Bank of Canada Governor Tiff Macklem is standing by his assertion that the current bout of high inflation is transitory, even as top Canadian bank executives question that narrative and warn that price pressures could persist.
FORMER CANADIAN CENTRAL BANKER PUSHES CORNWALL CONSENSUS AFTER WASHINGTON CONSENSUS DIES
G&M - Kevin Carmichael (2021-10-15)
At the time, her bosses at Finance as well as her former professors thought they had cracked the code by promoting a policy mix that emphasized free markets over government intervention. It came to define mainstream policy-making and was even given a name: the Washington Consensus, so called because the International Monetary Fund and the World Bank — both based in Washington, D.C. — were by then making loans contingent on spending discipline, market-determined exchange rates and the like.
“The Washington Consensus emerged at a time when it felt like market forces could deliver a lot of what we wanted, and if we focused on that, the benefits of increased growth, increased productivity, would be distributed to people in different income brackets and across different cultural groups,” Wilkins said in an interview on Oct. 13. “History has proved us wrong in that regard.”
MACKLEM AIMS TO TAKE BIGGER ROLE ON WORLD STAGE AFTER YEAR OF PUTTING OUT FIRES AT HOME
FP - Kevin Carmichael (2021-10-13)
Does the G20 even still meet? Maybe no one cares, but we probably should. Canada does better when the world’s bullies agree to down swords and respect a common set of rules and norms. Think back to 2008 and 2009. A smallish country’s banking system, apparently the soundest in the world, was still at the mercy of whatever shenanigans they were getting up to in the world’s major financial centres.
Canada has never really had the economic clout necessary to make people take notice, and it’s been a long time since we spent enough on the military to be of much help on security matters. But Ottawa has a tradition of sending technocrats out into the world to help keep the international conversation going, contributing ideas and/or time to efforts that have little direct connection to their day jobs.
U.S. HOUSE VOTES FOR SHORT-TERM DEBT CEILING FIX, AVERTING DEFAULT
Reuters - Susan Cornwell and Richard Cowan (2021-10-13)
The Democratic-controlled U.S. House of Representatives gave final approval on Tuesday to legislation temporarily raising the government's borrowing limit to $28.9 trillion, pushing off the deadline for debt default only until December.
GLOBAL CORPORATE TAX OVERHAUL ADVANCES AS 136 NATIONS SIGN ON
FP - Leigh Thomas (2021-10-12)
After years of missed deadlines and wrangling over how to handle global tech firms such as Facebook Inc. and Alphabet Inc.’s Google, Friday’s deal included a 15 per cent minimum rate for corporations and the main parameters of how much profits of multinationals would be taxed in more countries: 25 per cent of profits over a 10 per cent margin.
JANET YELLEN’S ABOVE-THE-FRAY APPROACH IS PUT TO A POLITICAL TEST
Bloomberg - Saleha Mohsin (2021-10-12)
President-elect Joe Biden chose former Federal Reserve Chair Janet Yellen to lead the U.S. Department of the Treasury for her gravitas, quiet consensus building, and attention to data—qualities that served her well during a decades-long central banking career. Democrats and Republicans alike laud her judgment.
OSFI SUMMARIZES RESPONSES TO ITS CLIMATE RISK DISCUSSION PAPER
OSFI - OSFI (2021-10-12)
For FRFIs, OSFI agrees guidance on climate-related risks should be principles-based and consider the Canadian context as well as international developments. Furthermore, any such guidance would be best informed by results from the Bank of Canada-OSFI joint pilot project on climate risk scenarios, for which stakeholders can expect further communication later this year. Taking these factors into account, OSFI expects to communicate next steps on its climate-related policy work early next year.
IMF CUTS GLOBAL GROWTH FORECAST, SAYS CENTRAL BANKS MUST BE VIGILANT ON INFLATION
G&M - Mark Rendell (2021-10-12)
Central banks should be prepared to act quickly if inflation proves to be more persistent than expected, the International Monetary Fund said Tuesday.
HIGH INFLATION COULD BE ‘A LITTLE MORE PERSISTENT’ THAN EXPECTED, BOC’S MACKLEM SAYS
G&M - Mark Rendell (2021-10-08)
Bank of Canada governor Tiff Macklem says high inflation could be “a little more persistent” than the central bank previously thought, while the economic recovery could take longer than expected.
TOKEN OF ALL TOKENS: COULD A $1T COIN FIX THE U.S. DEBT LIMIT?
CTV - Calvin Woodward (2021-10-06)
Some politicians think they've found a silver bullet for the impasse over the debt limit, except the bullet is made of platinum: Mint a $1 trillion coin, token of all tokens, and use it to flood the treasury with cash and drive Republicans crazy.
CANADIAN MUNICIPAL BONDS REMAIN 'UNDERVALUED' AS FINANCES IMPROVE, INVESCO'S HOOPER SAYS
FP - Derek Decloet (2021-10-06)
Cities such as Toronto suffered a fiscal blow after the pandemic forced them to lock down, crimping revenue from local sources such as transit and parking. But federal and provincial governments stepped in with billions in aid, strengthening the “implicit guarantee” on Canadian municipal debt, said Hooper, a senior portfolio manager with the Atlanta-based firm.
CANADA INVOKES 1977 TREATY WITH U.S. IN BID TO HALT LINE 5 CLOSING
G&M - Steven Chase (2021-10-05)
The move escalates a dispute in which U.S. President Joe Biden’s administration has been reluctant to intervene. Last May, U.S. Secretary of Energy Jennifer Granholm told reporters the White House had no plans to get involved, saying it would be up to the courts to settle.
THE DEBT CEILING: CAN THE US AVERT A DISASTROUS DEFAULT?
FT - Colby Smith (2021-10-05)
The US government is hurtling towards an unprecedented debt default in roughly two weeks’ time if lawmakers do not act to raise the federal limit on borrowing and enable the Treasury department to pay government commitments already approved by Congress.
DIVERSE BOARDS TO PICK THE NEXT BOSTON AND DALLAS FED BANK CHIEFS
Reuters - Ann Saphir (2021-10-05)
The searches soon to get underway for two new top U.S. central bankers will be an important test for what has been a rallying cry of sorts for proponents of diversity: that boards matter.
AN END TO SUPER-CHEAP MONEY? CENTRAL BANKS BEGIN TIGHTENING CYCLE
FP - Chris Giles (2021-10-04)
No longer are central bankers seeking to do whatever they can to ensure money is available for households, companies and governments to borrow at exceptionally favourable rates. Along with Norway’s monetary tightening, the first in any advanced economy since the pandemic began, four emerging economy central banks — Pakistan, Hungary, Paraguay and Brazil — also raised the cost of borrowing this week, while the U.S. Federal Reserve and Bank of England both signalled a move towards tightening monetary policy.
These guardians of monetary policy are generally satisfied that the economic recovery has proved stronger than they feared at the start of the year. But they are beginning to worry that money might become too cheap for too long. That would threaten rising inflation, excess borrowing and even financial instability as the world emerges from the coronavirus crisis.
CHINA EVERGRANDE TO SELL BANK STAKE TO STATE-OWNED FIRM FOR $1.5 BILLION
WSJ - Serena Ng and Xie Yu (2021-10-01)
A Chinese state-owned enterprise struck a deal to buy most of China Evergrande Group ’s stake in a commercial bank for $1.5 billion, the latest sign that the country’s authorities are trying to help the property giant resolve some of its financial troubles.
BANKING REGULATOR PLANNING FOR MORE VOLATILITY IN FINANCIAL SECTOR
Investment Executive - Ian Bickis (2021-10-01)
The regulator is working with the Bank of Canada and the private sector to better understand the risks that the transition will bring, and is also consulting widely on how to identify, measure and respond to climate-related risks, with more requirements coming, he said.
BOC LIKELY TO LET INFLATION RUN HOT, KEEP INTEREST RATES LOW, TEACHERS’ CHIEF ECONOMIST SAYS
FP - Shelly Hagan (2021-09-29)
“They want to go later. They want to ensure the self-sustaining recovery takes shape and that the output gap closes,” Mulraine said during a panel discussion at the Bloomberg Canadian Fixed Income Conference on Tuesday. “They will go on or just after the output gap closes.”
THE FIERCE URGENCY OF NOW: THE CANADIAN FINANCIAL SECTOR IN A POST-PANDEMIC WORLD, A PRUDENTIAL PERSPECTIVE
OSFI - OSFI (2021-09-29)
OSFI’s mandate says nothing about climate, but it does make us responsible for contributing to public confidence in Canada’s financial system. Getting to net zero by 2050 will mean Canada’s economy will have to adjust. Canada’s financial system will be a critical enabler to that adjustment and OSFI has an obligation to ensure that FRFIs and federally regulated pension plans (FRPPs) are fit to manage the risks that will accompany that adjustment.
U.S. SENATE FAILS TO ADVANCE DEBT CEILING, GOVERNMENT FUNDING MEASURE
Reuters - Richard Cowan and David Morgan (2021-09-28)
A sharply divided U.S. Senate failed on Monday to advance a measure to suspend the federal debt ceiling and avoid a partial government shutdown, as Republican lawmakers denied the bill the votes necessary to move forward.
U.S. SENATORS CALL FOR 'FULL ACCOUNTABILITY' IN WORLD BANK DATA CONTROVERSY
Reuters - David Lawder and Andrea Shalal (2021-09-28)
The top Democrat and Republican on the U.S. Senate Foreign Relations Committee have urged President Joe Biden to "ensure full accountability" over a World Bank data-rigging controversy that has embroiled International Monetary Fund chief Kristalina Georgieva.
NATIONAL DAY FOR TRUTH AND RECONCILIATION
OSFI - Peter Routledge (2021-09-28)
As an organization, OSFI is dedicated to increasing Indigenous representation. In addition to facilitating underrepresented groups, including Indigenous peoples, to apply for positions, we are expanding our reach to more areas of the country where members of those groups reside. We are also supporting our managers to familiarize themselves with the benefits of employment equity hiring and to increase diversity on their selection boards and teams.
PELOSI SETS THURSDAY VOTE ON PASSAGE OF $1 TRILLION INFRASTRUCTURE BILL
Reuters - Reuters (2021-09-26)
"Tomorrow, September 27, we will begin debate on the Bipartisan Infrastructure Framework on the Floor of the House and vote on it on Thursday, September 30, the day on which the surface transportation authorization expires," Pelosi said in a letter to her fellow Democrats released by her office.
CENTRAL BANKS CAN DO A LOT FAST. WILL IT BE THEIR DOWNFALL?
Bloomberg - Daniel Moss (2021-09-26)
Central banks were the first economic responders to the Covid-19 pandemic. From Washington to Wellington, policy makers swiftly deployed tools developed during the global financial crisis and found new ways to shore up credit markets vital to the functioning of modern commerce.
FEDERAL DEFICIT HIT $48.5 BILLION OVER FIRST FOUR MONTHS OF FISCAL YEAR
Investment Executive - CP (2021-09-26)
Friday’s fiscal monitor says the deficit to date now reflects current economic challenges caused by Covid-19, including ongoing public health restrictions.
BRITAIN'S SUNAK ACCEPTS CALL FOR FINANCIAL REFORMS AFTER GREENSILL COLLAPSE
Reuters - Reuters (2021-09-24)
British finance minister Rishi Sunak has ordered two immediate reviews of the country's financial regulation related to the collapse of supply chain finance firm Greensill Capital.
FED'S POWELL SAYS TAPER COULD START IN NOVEMBER, END MID-2022
FP - Matthew Boesler (2021-09-23)
That refers to the policy gathering on Nov. 2-3, though he left the door open to waiting longer if needed and stressed that tapering was not meant to be a direct signal on the timing of rate liftoff.
FED LIKELY TO OPEN BOND-BUYING 'TAPER' DOOR, BUT HEDGE ON OUTLOOK
Reuters - Howard Schneider (2021-09-22)
The Federal Reserve is expected to clear the way on Wednesday for reductions to its monthly asset purchases later this year and show in updated projections whether higher-than-expected inflation or a resurgent coronavirus pandemic is weighing more on the economic outlook.
FED TO REVEAL NEW PROJECTIONS WITH INVESTORS ON ALERT FOR RATE LIFTOFF TIMING
Reuters - Lindsay Dunsmuir (2021-09-21)
U.S. Federal Reserve officials will lay bare how soon and how often they think the economy will need interest rates rises over the next three years when they release new forecasts at their policy meeting on Wednesday, with investors on alert for a faster pace of tightening.
CANADIAN DOLLAR CLINGS TO WEEKLY GAIN AS CHINA INJECTS LIQUIDITY
G&M - Reuters (2021-09-19)
The Canadian dollar
U.S. TREASURY'S YELLEN: DEBT DEFAULT WOULD 'PERMANENTLY' WEAKEN AMERICA
Reuters - David Lawder (2021-09-19)
U.S. Treasury Secretary Janet Yellen issued a fresh plea for Congress to raise the federal debt ceiling on Sunday, arguing a default on U.S. debt would trigger a historic financial crisis.
BANKS, ENERGY SHARES MAY MOVE AS CANADA VOTES: INVESTORS’ GUIDE
Bloomberg - Michael Bellusci (2021-09-19)
With Canadians set to vote Monday in a highly competitive election, the outlook for the two largest sectors in country’s stock index hangs in the balance.
Polls say the race is close. If Prime Minister Justin Trudeau wins, as now looks likely, he may follow through on a promise to increase taxes on the biggest banks and insurance companies and impose stricter emissions rules on oil and gas companies. Financial and energy stocks make up 44% of the benchmark S&P/TSX Composite Index.U.S. BANKING REGULATORS WORKING ON CLIMATE RISK MANAGEMENT GUIDANCE, OFFICIAL SAYS
Reuters - Michelle Price (2021-09-16)
U.S. banking regulators are working on new climate risk management guidance for large lenders, a top official said on Wednesday, in another sign of efforts to incorporate the risks posed by rising temperatures into financial rules.
INVESTORS TENSE UP AS FEARS OF POST-ELECTION GRIDLOCK RISE IN CANADA
Reuters - Fergal Smith (2021-09-16)
Foreign investors are growing more worried that Canada's federal election on Monday could result in a deadlock that hampers Ottawa's response to the COVID-19 pandemic and further slows the economic recovery from the crisis.
DODD-FRANK ARCHITECTS CALL FOR REAPPOINTMENT OF FED'S POWELL
Reuters - Howard Schneider (2021-09-14)
The Democratic architects of a key overhaul of U.S. financial regulation a decade ago called on President Joe Biden to reappoint Fed Chair Jerome Powell to a second term, rebuffing arguments he has been weak on regulatory issues.
AFTER THE 'BAZOOKA', BANK OF JAPAN DISMANTLES THE WORK OF ITS RADICAL CHIEF
Reuters - Leika Kihara (2021-09-13)
After years of shock-and-awe stimulus, the Bank of Japan is quietly rolling back radical policies introduced by its bold chief Haruhiko Kuroda and pioneering controversial new measures that blur the lines between central banking and politics.
TREASURY, FINANCIAL INDUSTRY DISCUSS CRYPTOCURRENCY 'STABLECOINS'
Reuters - Pete Schroeder (2021-09-13)
The U.S. Treasury Department met with a number of industry participants this week to quiz them about the risks and benefits posed by stablecoins -- a rapidly growing type of cryptocurrencies, the value of which is pegged to traditional currencies, according to three people with direct knowledge of the meetings.
YELLEN URGES QUICK U.S. ADOPTION OF STABLECOIN RULES
Reuters - Pete Schroeder (2021-09-13)
The group discussed the rapid growth of stablecoins, which are cryptocurrencies that attempt to peg their values to a conventional currency, like the U.S. dollar, according to the Treasury. Regulators discussed their potential uses, as well as risks to end users and the financial system.
BANK OF CANADA PLANS TO RAISE KEY RATE BEFORE WINDING DOWN BOND BUYING PROGRAM, MACKLEM SAYS
G&M - Mark Rendell (2021-09-10)
Bank of Canada Governor Tiff Macklem has provided the clearest picture yet on how the central bank plans to reduce monetary stimulus, saying it expects to start raising interest rates before entirely winding down its bond buying program.
CAN THE CONSERVATIVES ACTUALLY BALANCE THE FEDERAL BUDGET WITHIN 10 YEARS?
G&M - Patrick Brethour (2021-09-10)
The Conservatives are promising to balance the federal budget within 10 years without spending cuts or tax increases, even as they add tens of billions of dollars in new spending on top of the 2021 budget.
BANK OF CANADA SEES RECOVERY ON TRACK, STAYS COURSE ON POLICY
FP - Kevin Carmichael (2021-09-10)
The message from Canada’s central bankers was that “even though the recovery lost a bit of steam in the second quarter, the ingredients are there for economic activity to strengthen through the remainder of the year,” Sri Thanabalasingam, an economist at Toronto-Dominion Bank, said in a note to clients. “While the Delta variant could complicate matters, the bank, like us, do not expect the virus to blow the recovery off course in the fourth quarter.”
BANK OF CANADA’S NEW OPENNESS GETS A TEST DURING FEDERAL ELECTION CAMPAIGN
G&M - DAVID PARKINSON (2021-09-09)
The Bank of Canada has returned from an eventful summer with a tricky job on its hands: how to communicate vital information while keeping your mouth shut.
ANK OF CANADA SEES RECOVERY ON TRACK, STAYS COURSE ON POLICY
FP - Kevin Carmichael (2021-09-09)
As expected, governor Tiff Macklem and his deputies opted to leave the current level of stimulus unchanged at the end of their latest round of interest-rate deliberations on Sept. 8. The election raised the bar for a shift in policy, as Macklem would only risk becoming a campaign issue if economic conditions demanded it. They didn’t, allowing the governor to turn the central bank’s latest interest-rate decision into a non-event.
BANK OF CANADA MAY DELAY QUANTITATIVE EASE TAPER, MARKET DOUBTS RATE HIKES: RBC
Better Dwelling - Daniel Wong (2021-09-09)
Remember, this isn’t just low rates. They’re flooding the system with credit to push the cost of goods higher. Delaying a taper would mean adding billions more in credit stimulus for longer.
ELECTION CAMPAIGN TO KEEP BANK OF CANADA QUIET: DECISION GUIDE
Bloomberg - Shelly Hagan (2021-09-08)
The Bank of Canada will likely tread carefully this week, mutedly acknowledging a weaker-than-expected economy in the midst of a heated election campaign.
BANK OF CANADA EXPECTED TO STAY THE COURSE IN THIS WEEK’S POLITICALLY SENSITIVE RATE DECISION
G&M - Mark Rendell (2021-09-07)
The Bank of Canada is widely expected to hold the line on monetary policy this week after a series of economic releases showed weaker-than-expected growth even as inflation hit a decade-high.
BUSINESS INSOLVENCY FILINGS DROP TO 35-YEAR LOW, BUT 'SLEW' OF FILINGS FEARED AFTER PANDEMIC AID ENDS
FP - Kelsey Rolfe (2021-09-07)
Just 160 businesses filed for insolvency in July, marking a 35-year low in new filings, according to new data from the Office for the Superintendent of Bankruptcy.
The record low, which represented a 28.3 per cent decrease in filings from the month prior, is largely due to the federal government’s pandemic wage and rent subsidies and other business support programs such as the Canada Emergency Business Account, which have been extended until October.
JUSTIN TRUDEAU RELEASES LIBERALS’ MULTIBILLION-DOLLAR PLATFORM; INCLUDES 15% TAX FOR HIGH-INCOME EARNERS
G&M - BILL CURRY AND CAMPBELL CLARK (2021-09-02)
The platform estimates the federal deficit will decline from $156.9-billion this year to $32-billion in 2025-26, but offers no timeline for erasing it entirely. Those annual deficits would be $14-billion higher per year on average than the pre-election forecast the Parliamentary Budget Officer released in August.
CHINESE STATE FIRMS TO TAKE BIG STAKE IN ANT'S CREDIT-SCORING JV -SOURCES
Reuters - Julie Zhu (2021-09-02)
State-backed firms are set to take a sizeable stake in a key Ant Group asset for the first time, three people told Reuters, in a move that will loosen the Chinese fintech giant's grip on a data treasure trove of over 1 billion users but help revive its IPO.
HOW RICHARD NIXON ROCKED THE WORLD 50 YEARS AGO WITH JUST THE GREENBACK AND GOLD
FP - Colin McClelland (2021-09-01)
Nixon unhitched the U.S. dollar from the value of gold. The move changed the global monetary system almost overnight. The eventual result was the floating international exchange rates we still use today.
The worldwide economy had expanded greatly and U.S. dollar use was widespread. It was good to have the global currency, but there were four times as many dollars in circulation as the U.S. had in gold reserves to back them up. This Bretton Woods exchange rate system, named after the New Hampshire town where it was hammered out after the Second World War, was running out of steam.
SCOTIABANK ECONOMIST RIPS CANADA AGENCY FOR ELECTION GDP ‘BOMB’
Bloomberg - Erik Hertzberg (2021-09-01)
A prominent bank economist hurled criticism at Canada’s statistics agency after it revised its economic figures for April and May with little explanation, giving Prime Minister Justin Trudeau’s political opponents an opening to criticize his record.
FED'S MESTER NOT READY TO ACCEPT RECENT INFLATION SURGE AS MEETING CENTRAL BANK'S GOAL
Reuters - Jonnelle Marte (2021-08-31)
Cleveland Federal Reserve Bank President Loretta Mester said on Monday that the U.S. economy is recovering strongly but she is not yet convinced that recent inflation readings will be enough to satisfy the price stability goal the U.S. central bank revamped a year ago.
TRUDEAU’S POPULIST POSE COULD HURT CANADA’S ECONOMY
Bloomberg - Michael R. Strain (2021-08-31)
Prime Minister Justin Trudeau of Canada would reject claims that his leadership style is similar to that of former U.S. President Donald Trump or British Prime Minister Boris Johnson. But in at least in one respect the comparison is getting closer to hitting its target.
U.S. WILL RAISE RATES AS LONG AS HIRING KEEPS IMPROVING, POWELL TELLS JACKSON HOLE
CBC - AP (2021-08-30)
The Federal Reserve will start dialing back its ultra-low-rate policies this year as long as hiring continues to improve, Chair Jerome Powell said Friday, signaling the beginning of the end of the Fed's extraordinary response to the pandemic recession.
CENTRAL BANKS' SHIFT FROM CRISIS POLICIES GATHERS MOMENTUM
Reuters - Dan Burns (2021-08-27)
While the financial world waits for the Federal Reserve to start reversing its ultra-loose policy stance, recent moves by a clutch of other central banks signal the days of pandemic-era accommodation are already numbered even as COVID-19 continues to impede smooth economic recoveries around the world.
TRUDEAU VOWS 3% SURTAX ON BIG BANKS, INSURANCE TO GENERATE EXTRA $2.5 BILLION
FP - Kait Bolongaro and Kevin Orland (2021-08-26)
At a campaign stop in Vancouver, the leader of the governing Liberals promised to hike the corporate income tax rate by three percentage points on profit over $1 billion (US$793 million) at financial institutions. The measures, which would bring the rate to 18 per cent from 15 per cent currently, are expected to generate $2.5 billion for government coffers over the next four years, starting in 2022-3, according to a party news release.
GOLDMAN SACHS RAISES ODDS ON U.S. FEDERAL RESERVE TAPER ANNOUNCEMENT IN NOVEMBER
G&M - Reuters (2021-08-25)
Goldman Sachs economists have raised the odds that the U.S. Federal Reserve will announce the start of tapering its bonds purchases in November, predicting the central bank will likely opt to dial back purchases by US$15-billion then and at meetings that follow.
FED CHAIR JEROME POWELL CHARMED BOTH REPUBLICANS, DEMOCRATS IN U.S. CONGRESS
FP - Christopher Condon, Steven T. Dennis and Saleha Mohsin (2021-08-25)
Powell has worked Congress during his three years at the helm like no Fed chair since Alan Greenspan. But where Greenspan was a regular of the cocktail party circuit, Powell has taken a more workmanlike approach.
THINK TANK REPORT OFFERS MIXED ASSESSMENT OF FEDERAL RESERVE CHAIR JEROME POWELL’S TENURE
G&M - Ann Saphir (2021-08-24)
A think tank highly critical of Federal Reserve chair Jerome Powell’s record on banking regulation released an assessment of his four-year tenure on Monday that is by turns scathing and complementary, highlighting the competing considerations as U.S. President Joe Biden weighs whether to reappoint him.
SWEDEN’S DEPARTING PREMIER PAVES A PATH FOR FINANCE CHIEF
Bloomberg - Ott Ummelas and Niclas Rolander (2021-08-23)
The resignation of Sweden’s Stefan Lofven brings the largest Nordic economy a step closer to its first-ever female prime minister, and with it the task of fixing an ailing political system.
CENTRAL BANKS ARE RISKING THEIR INDEPENDENCE
Bloomberg - Mervyn King and Dan Katz (2021-08-23)
Central bankers and journalists will assemble for the virtual Jackson Hole conference later this week. Their agenda will be broad. The future path of quantitative easing, the health of the labor market, and other critical monetary and regulatory matters will command center stage. But we can also expect pronouncements on issues once considered the domain of elected politicians, including climate change, racial justice and inequality.
CHINA'S PLANNED ANTI-SANCTIONS LAW FOR HONG KONG UNSETTLES FINANCIAL SECTOR
Reuters - Alun John and Scott Murdoch (2021-08-20)
Global banks and other financial institutions in Hong Kong are scrambling to find out details of China's planned imposition of an anti-sanctions law on the city, and trying to understand how it could impact their operations in the financial hub.
AFGHANISTAN CENTRAL BANKER FLEES, CURRENCY DROPS TO RECORD LOW AMID TUMULT
FP - Kartik Goyal and Rahul Satija (2021-08-18)
The Afghani fell as much as 1.7 per cent on Tuesday to 83.5013 per dollar, a fourth day of decline, according to data compiled by Bloomberg. The central bank was told there would be no more dollar shipments on Friday, which curtailed its ability to supply currency and led to more panic, acting Governor Ajmal Ahmady wrote in a Twitter thread.
NOBODY’S RUNNING LEBANON, CENTRAL BANK BOSS SAYS
G&M - LAILA BASSAM AND NAFISA ELTAHIR (2021-08-16)
Lebanon’s central bank governor said nobody was running the country, hitting back after government criticism of his decision to halt fuel subsidies that have drained currency reserves.
TRUDEAU TRIGGERS SNAP ELECTION, SENDING CANADIANS TO THE POLLS ON SEPT. 20
G&M - Robert Fife (2021-08-16)
Justin Trudeau has triggered a long-expected snap election, seeking to gain a majority on the strength of his Liberal government’s record in managing COVID-19 – but opposition parties are casting the campaign as unnecessary and a blatant attempt at a power grab amid the fourth wave of the pandemic.
TRUDEAU PLANNING TO CALL SNAP ELECTION FOR SEPT. 20 AS CANADA ENTERS FOURTH WAVE
G&M - LEE BERTHIAUME AND MIA RABSON (2021-08-13)
Prime Minister Justin Trudeau is expected to trigger an election on Sunday by asking Gov. Gen. Mary Simon to dissolve Parliament even though Canada’s top doctor says the country is now in the grips of a fourth wave of COVID-19.
AS MARKETS STABILIZE, OSFI ALLOWS LEVERAGE RELIEF TO EXPIRE
Investment Executive - James Langton (2021-08-13)
“When OSFI introduced this special treatment of leverage ratio exposure measures in the spring of 2020, it was the appropriate response at the time to the uncertainty created by the pandemic,” said Ben Gully, OSFI’s assistant superintendent, regulation sector, in a statement.
ERIN O’TOOLE’S ANTI-TRADE, ANTI-BUSINESS STAND IS AT ODDS WITH HIS OWN PARTY’S HISTORY
G&M - DAVID PARKINSON (2021-08-11)
Conservative Leader Erin O’Toole pitches his position on free trade as a stand against the failed policies of the Liberal government. In reality, his battle is with the ghosts of his own party.
THE DEBT-CEILING FARCE IS A HEADACHE INVESTORS COULD DO WITHOUT
Bloomberg - Benjamin Purvis (2021-08-11)
The very existence of the debt ceiling is utterly superfluous. Every couple of years members of Congress have to vote to allow borrowing to fund measures that they’ve already approved through individual spending bills.
Its main function is political: Whichever party isn’t in power at the time uses it to try to either extract something from, or embarrass, the other side.
On top of that, the limit isn’t really the limit. By invoking the vague catchall of “extraordinary measures,” Uncle Sam can keep on borrowing even after it’s hit the cap—or when the limit has been reinstated following a suspension, as was the case at the end of last month. Given that the alternative is either what’s known as a technical default or a seizing up of everyday government spending, that’s a good thing, even if you’re a fiscal hawk, which is an endangered species these days.
LEAH ANDERSON APPOINTED INTERIM CDIC HEAD
Investment Executive - IE (2021-08-10)
Leah Anderson is taking over as interim head of the Canada Deposit Insurance Corporation (CDIC) after Peter Routledge left the post to lead the Office of the Superintendent of Financial Institutions (OSFI).
B.C. JUDGE TAKES AIM AT HEART OF CASE AGAINST MENG WANZHOU
G&M - Sean Fine (2021-08-06)
The U.S. summary – which in Canadian law is presumed to be reliable – is missing a key word: “Huawei’s engagement with Skycom is normal business co-operation.” The word “controllable” does not appear.
FINANCIAL REGULATORS IIROC AND MFDA TO BE MERGED INTO ONE
CBC - CP (2021-08-05)
The roles of both regulatory bodies have increasingly overlapped in recent years, prompting calls to review the regulatory framework.
FINCEN NAMES NEW ACTING DIRECTOR, BEGINS SEARCH FOR PERMANENT CHIEF
WSJ - Dylan Tokar (2021-08-05)
The U.S. Treasury Department’s anti-money-laundering unit is undergoing its second leadership change this year, as current acting director Michael Mosier prepares to leave at the end of the week.
CANADA’S CENTRAL BANK HEAD WROTE A BIZARRE OPINION PIECE TO SAY HE’S NAILING IT
Better Dwelling - Stephen Punwasi (2021-08-05)
The sitting head of the central bank made the unusual move of writing an opinion column. Instead of using fancy data points, he whipped out a pen and provided no evidence to explain the current inflation environment. It wasn’t his first time either, with economists previously asking him to provide any evidence for the statements he’s made.
CANADA SETS PLAN TO MERGE INVESTMENT REGULATORS INTO ONE AGENCY
Bloomberg - Kevin Orland and Paula Sambo (2021-08-04)
Canada’s securities regulators plan to merge two industry groups that oversee financial advisers into a single organization, a move intended to address years of complaints about the overlapping roles and higher costs of the groups.
Provincial regulators published Tuesday a framework for how to combine the Investment Industry Regulatory Organization of Canada, which regulates investment advisory firms that sell a broad range of securities, with the Mutual Fund Dealers Association of Canada, which oversees firms that sell funds.THE HORROR SCENARIO LURKING IN THE PLUMBING OF FINANCE
FP - John Dizard (2021-08-03)
The equivalent fear hanging over the financial system now is: “Don’t create an artificial shortage of good collateral! No! No!”
BANK OF CANADA RESEARCHERS ARGUE IN FAVOUR OF INFLATION OVERSHOOTS FOLLOWING RECESSIONS
G&M - Mark Rendell (2021-07-29)
Central bankers should let inflation run temporarily above target when the economy is coming out of a severe recession, according to new Bank of Canada research that provides a window into how the central bank is thinking about inflation as the pandemic wanes.
BANK OF CANADA APPOINTS FIRST HEAD OF RETAIL PAYMENTS SUPERVISION
G&M - Mark Rendell (2021-07-29)
In June, the bank assumed responsibility for monitoring online payment systems, such as digital wallets, run by fintech and paytech companies. The new system will see the bank maintain a registry of retail payment providers in Canada, and monitor the strength of their risk-management protocols.
AS FED TIPTOES AROUND TAPERING, INVESTORS LOOK TO JACKSON HOLE MEETING FOR CLARITY
Reuters - David RandallGertrude Chavez-dreyfuss (2021-07-29)
Investors looking for clear guidelines on when the Federal Reserve will begin tapering its massive bond purchases were left waiting Wednesday, with all eyes next on the annual Jackson Hole conference of central bankers in August.
OSFI FINALIZES ITS GUIDELINE ON FOREIGN ENTITIES OPERATING IN CANADA ON A BRANCH BASIS
OSFI - OSFI (2021-07-29)
Today, the Office of the Superintendent of Financial Institutions (OSFI) issued the final version of Guideline E-4 Foreign Entities Operating in Canada on a Branch Basis. This guideline replaces existing guidelines E-4A Role of the Chief Agent and Record Keeping Requirements and E-4B Role of the Principal Officer and Record Keeping Requirements.
BANK OF CANADA RESEARCHERS ARGUE IN FAVOUR OF INFLATION OVERSHOOTS FOLLOWING RECESSIONS
G&M - Mark Rendell (2021-07-28)
Central bankers should let inflation run temporarily above target when the economy is coming out of a severe recession, according to new Bank of Canada research that provides a window into how the central bank is thinking about inflation as the pandemic wanes.
ONTARIO SETS RECORD FOR LOONIE GREEN BOND BEFORE FEDERAL SALE
Bloomberg - Esteban Duarte (2021-07-28)
The province of Ontario broke the record for a Canadian dollar green bond sale, raising C$2.75 billion ($2.19 billion) on Tuesday to fund a train line expansion among other purposes.
CENTRAL BANKS SHOULD BE READY TO ACT SWIFTLY IF INFLATION ISN’T TRANSITORY: IMF
Better Dwelling - Daniel Wong (2021-07-28)
The combination has pushed global inflation readings higher. Canada’s consumer price index (CPI) is currently reading 3.6% higher than a year before. US CPI came in even higher, showing annual growth of 5.4% at the last measure. This is the highest rate both countries have experienced in a very long time. Naturally, people are starting to worry about how high this can get over the next few years.
U.S. TREASURY SECRETARY YELLEN WARNS CONGRESS ON DEBT LIMIT
Reuters - Doina Chiacu (2021-07-26)
U.S. Treasury Secretary Janet Yellen urged lawmakers on Friday to increase or suspend the nation's debt limit as soon as possible and warned that if Congress does not act by Aug. 2 the Treasury Department would need to take "extraordinary measures" to prevent a U.S. default.
FSRA PROPOSES FEES FOR TITLE REGULATION
Investment Executive - James Langton (2021-07-23)
FSRA is proposing a $10,000 fee for the initial approval of a credentialing body, and $5,000 for each credential application.
BANK OF CANADA APPOINTS SHARON KOZICKI DEPUTY GOVERNOR
G&M - Mark Rendell (2021-07-21)
The Bank of Canada has appointed long-time central banker Sharon Kozicki to the position of deputy governor – the second change to the bank’s governing council this month.
HOUSING TAKES ON LARGER EMPHASIS IN INFLATION TRACKING
G&M - Matt Lundy (2021-07-21)
Indeed, the new CPI basket was noticeably influenced by abrupt changes in how Canadians spent amid COVID-19.
A DRAMATIC REBOUND IN HIRING COULD THROW THE BANK OF CANADA’S INFLATION EXPECTATIONS FOR A LOOP
G&M - DAVID PARKINSON (2021-07-20)
The Bank of Canada’s strongest argument against the current concerns of rising inflation is the big hole in employment left by COVID-19. But what if that hole suddenly filled in?
IF CENTRAL BANKS DON’T WANT US TO WORRY ABOUT INFLATION, THEY SHOULD SOUND MORE LIKE THEY DO
G&M - Andrew Coyne (2021-07-19)
Confirmation bias being what it is, inflation hawks and doves have each been able to point to evidence in recent days to prove their point.
WHAT MIGHT THE BANK OF ENGLAND DO TO WEAN THE UK ECONOMY OFF STIMULUS?
Reuters - Reuters (2021-07-19)
Two top Bank of England officials surprised investors this week by saying the time might be nearing for the British central bank to rein in the huge stimulus programme it has used to steer the economy through the coronavirus crisis.
TRUDEAU’S RHETORIC CAN’T CHANGE CANADA’S FISCAL REALITY
G&M - JASON CLEMENS, MILAGROS PALACIOS AND NIELS VELDHUIS (2021-07-16)
One of the differences between being on the opposition and government benches is that the government must be held accountable for actual performance. The evidence is quite clear that the Trudeau government has increased taxes, has overseen a marked increase in government indebtedness and recorded comparatively weak economic growth. Rhetoric can’t change that reality.
It’s imperative Canadians distinguish between convenient political rhetoric and reality when it comes to the country’s finances, particularly as we approach a potential fall election. The Trudeau government continues to promulgate three assertions that must be clarified.
THE LOONIE IS SINKING FAST – AND THE FED IS TO BLAME
G&M - David Berman (2021-07-16)
The Canadian dollar has been losing ground over the past two months, but don’t pin the blame on softer commodity prices, shifting Bank of Canada monetary policies or general risk aversion among global investors.
MONETARY POLICY REPORT PRESS CONFERENCE OPENING STATEMENT
OSFI - OSFI (2021-07-15)
The Governing Council also discussed the amount of slack in the economy and the outlook for potential growth. Estimates of these measures have always been imprecise but are especially difficult given the rapid changes wrought by the pandemic. In the projection, economic slack is absorbed in the second half of 2022. To help manage the uncertainty surrounding this assessment, we will be watching a broader spectrum of indicators of slack, including a range of labour market measures.
BANK OF CANADA PARES BACK BOND BUYING, RAISES INFLATION FORECAST
G&M - Mark Rendell (2021-07-15)
The central bank cut its government bond purchases to a target of $2-billion a week, from $3-billion, further reducing the stimulus put in place early in the COVID-19 pandemic. It held its policy rate at 0.25 per cent and reaffirmed it does not expect to raise interest rates before the second half of 2022 at the earliest.
BANK OF CANADA TO FURTHER TAPER TOXIC PROGRAM THAT HELPED PUSH HOME PRICES HIGHER
Better Dwelling - Stephen Punwasi (2021-07-15)
Yeah, that’s not a typo. Billion, with a B. Per week. Today the BoC announced their widely expected move to trim their QE program. The rate of QE will be slowed to $2 billion per week, down from the $3 billion prior. The program had been cut earlier this year as well, down from $4 billion per week. The program’s size was just reduced by a third, and it’s half as much as it was earlier this year.
BANK OF CANADA EXPECTED TO FURTHER TAPER BOND PURCHASES THIS WEEK
G&M - Mark Rendell (2021-07-14)
The recent positive Canadian data, on top of several months of higher-than-expected inflation, should give the central bank conviction to move ahead with another cut to its weekly federal government bond-buying program, known as quantitative easing, analysts argued. The consensus view among economists is for the bank to reduce its pace of QE purchases – which are designed to hold down interest rates and encourage borrowing – to $2-billion a week from $3-billion.
CMHC AT A CROSSROADS: AGENCY FACES TOUGH DECISIONS AFTER LOSING MORTGAGE INSURANCE MARKET SHARE
FP - Stephanie Hughes (2021-07-13)
“There is no doubt that we have willingly chosen to forgo some profitable business that our competitors would find appealing,” then-chief executive Evan Siddall wrote in August, in a letter to Canada’s biggest lenders, following the implementation of the stricter standards. Siddall used the letter to caution the banks and others mortgage lenders about risky lending, warning that “there is a dark economic underbelly to this business that I want to expose.”
GREENSILL CAPITAL PAID DAVID CAMERON SALARY OF OVER $1 MILLION A YEAR -FT
Reuters - Reuters (2021-07-13)
Collapsed finance group Greensill Capital paid a salary of more than $1 million a year to former British Prime Minister David Cameron, the Financial Times reported on Monday, citing people familiar with the matter.
BANK OF CANADA WILL GET MORE ROOM TO HIKE RATES WITH US FED TURNING HAWKISH: RBC
Better Dwelling - Daniel Wong (2021-07-09)
A hike from the US would allow the BoC to hike, with much less pressure on currency exchange. If Canada hiked alone, it would slow credit growth and inflation, but may also impact exports. If both countries do it at the same time, the loonie’s increase against the US dollar would be minimal. That gives the BoC a little more room to make the next increase more comfortable… or hike even more if needed.
INFRASTRUCTURE BANK REFUSES MPS’ REQUEST TO DETAIL EXECUTIVE BONUSES
G&M - Bill Curry (2021-07-08)
The Canada Infrastructure Bank is refusing to disclose bonuses paid to executives despite a unanimous vote by MPs on a House of Commons committee calling for the amounts to be revealed.
FED OFFICIALS SAW PROGRESS TOWARD TAPER MOVE, MINUTES SHOW
FP - Craig Torres (2021-07-08)
The June meeting marked a turn in the central bank’s comfort with inflation risks amid heightened price pressures as the economy reopens from the pandemic, buoyed by massive monetary and fiscal-policy support. Officials also continued monthly purchases of US$80 billion of Treasuries and US$40 billion of mortgage-backed securities until “substantial further progress’ was made on inflation and employment.
BRITISH COLUMBIA’S AAA RATING IS STRIPPED BY S&P ON RISING DEBT
Bloomberg - Esteban Duarte (2021-07-08)
Canada’s third-largest province will run a deficit this fiscal year that’s “significantly larger” than expected when the pandemic began, which will likely lengthen the time to return to fiscal balance, S&P said in a statement Wednesday explaining the one-notch downgrade to AA+. The move comes less than two weeks after Fitch Ratings took a parallel rating action.
WHY WE SHOULD BE RELIEVED CANADIAN BANKS CAN’T INCREASE DIVIDENDS YET
G&M - Rita Trichur (2021-07-06)
It’s okay to admit it. After all, five big U.S. banks are increasing their dividends, and some are also planning to buy back their shares, moves that will handsomely reward their investors as the economy recovers from the pandemic.
130 COUNTRIES BACK OECD PLAN TO SET GLOBAL MINIMUM CORPORATE TAX RATE
CBC - AP (2021-07-05)
Some 130 countries have agreed on a global minimum tax backed by U.S. President Joe Biden as part of a worldwide effort to keep multinational firms from dodging taxes by shifting their profits to countries with low rates.
BANK OF CANADA IS QUIETLY UPDATING FORECAST MODELS TO INCLUDE DEBT AND REAL ESTATE
Better Dwelling - Stephen Punwasi (2021-07-05)
Remember that time the head of Canada’s central bank said the housing bubble was good for the economy? Soak it up, because that may be the last time it ever happens. The Bank of Canada (BoC) finished its technical report on the Terms-of-Trade Economic Model (ToTEM). The model, which is used by the BoC as their primary forecasting tool, has now entered its third update in 15 years.
CANADA AMONG 130-NATION DEAL TO OVERHAUL GLOBAL CORPORATE TAX RULES
G&M - Bill Curry (2021-07-02)
After years of negotiations, the United States, Canada and 128 other countries have announced a new global pact to overhaul the way large multinational companies are taxed.
BANKS COULD FACE MAJOR DISRUPTION FROM PUBLIC DIGITAL CURRENCIES, CARNEY SAYS
G&M - Mark Rendell (2021-07-02)
Dozens of monetary authorities around the world are contemplating launching central bank digital currencies (CBDCs), largely in response to the proliferation of cryptocurrencies and private digital currencies backed by large technology companies, such as Facebook Inc.
FITCH DOWNGRADES B.C.’S CREDIT RATING PARTLY BECAUSE OF FEDERAL DEBT
G&M - Patrick Brethour (2021-06-28)
British Columbia has lost a triple-A credit rating, with Fitch Ratings Inc. downgrading the province in part because of Canada’s rising federal debt burden.
FINANCE DEPARTMENT EXPERIENCING WAVE OF SENIOR DEPARTURES
G&M - Bill Curry (2021-06-28)
Several of the most senior officials in the federal Finance Department are leaving government – or have already left – after playing key roles in shaping Ottawa’s massive policy response to the COVID-19 pandemic.
CENTRAL BANKS’ BATTLE AGAINST PRIVATE ENTITIES TO CONTROL CRYPTOCURRENCIES HAS OFFICIALLY BEGUN
G&M - Ian McGugan (2021-06-28)
Central banks are bracing for a showdown with purveyors of cryptocurrencies and other private forms of money. To help win that battle, they are counting on a still murky concept known as central bank digital currencies, or CBDCs.
THE FUTURE OF MONEY: THE DIGITAL CURRENCY REVOLUTION IS HERE, AND MAY SWEEP AWAY 5,000 YEARS OF MONETARY HISTORY
G&M - Michael Doyle (2021-06-28)
For several hundred years, the people living on the Pacific island of Yap used giant rocks as a basic form of money. The most valuable of these massive limestone rings, called rai stones, weighed several thousand kilograms. As a result, they weren’t easily exchanged when an item was bought or sold. Boulders that were too big to roll from one owner to the next were left in a permanent resting place.
CANADA’S BANKING REGULATOR NAMES PETER ROUTLEDGE AS NEXT HEAD
G&M - James Bradshaw (2021-06-25)
The federal government has named Peter Routledge as the head of Canada’s banking regulator, choosing a former financial analyst and federal policy adviser with a keen understanding of the financial system’s intricacies who also has recent experience running a federal agency.
Mr. Routledge will take the helm of the Office of the Superintendent of Financial Institutions (OSFI) for a seven-year term as superintendent on June 29. He moves from his current post as chief executive of the Canada Deposit Insurance Corp., after a stint at the federal Finance Department and a Bay Street career analyzing and rating large Canadian banks and other institutions.
He succeeds Jeremy Rudin, who has led the regulator since 2014 and will step down when his term ends on Monday.
Mr. Routledge possesses a wonkish familiarity with the inner workings of the capital and liquidity rules that form the backbone of regulation for Canada’s financial sector. One of his first big decisions will be when to lift temporary restrictions on dividend payouts and share buybacks
Loading... implemented in response to the COVID-19 pandemic that have left banks flush with extra capital.BIDEN OUSTS HOUSING FINANCE CHIEF AFTER U.S. SUPREME COURT RULING
Reuters - Lawrence Hurley (2021-06-24)
President Joe Biden on Wednesday fired the head of the Federal Housing Finance Agency who had been appointed by his predecessor Donald Trump, acting hours after the U.S. Supreme Court expanded presidential powers to make it easier to oust the agency chief.
CANADA PENSION PLAN NOT PAYING FULL BENEFITS TO RECENT RETIREES DUE TO SYSTEMS DELAY
G&M - Rob Carrick (2021-06-23)
A small piece of your monthly Canada Pension Plan benefit is missing if you retired recently and chose to start payments immediately rather than delay them.
EX-DEPUTY GOVERNOR WARNS BANK OF CANADA AGAINST ‘MISSION CREEP’
G&M - Mark Rendell (2021-06-23)
Former Bank of Canada deputy governor John Murray is cautioning the central bank against “mission creep” as it moves into the final months of a major review of its monetary policy framework.
EU WATCHDOG TELLS BANKS TO HAVE A 10-YEAR CLIMATE PLAN
Reuters - Huw Jones (2021-06-23)
Banks in the European Union must have a 10-year plan spelling out how they will deal with environmental, social and governance (ESG) risks to their bottom line, the bloc's banking watchdog said on Wednesday.
INFLATION OVERSHOOT HAS BANK OF CANADA WEIGHING MANDATE TWEAKS
Bloomberg - Shelly Hagan (2021-06-23)
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CRA AUDITS OF ULTRA-WEALTHY CANADIANS YIELD ZERO PROSECUTIONS
Investment Executive - Christopher Reynolds (2021-06-23)
Green said federal authorities avoid pursuing Canada’s biggest tax cheats but go after small business owners who don’t pay their taxes under a “two-tiered system” pocked with “loopholes.”
BOC'S MACKLEM, LEADER OF AN ALL-MALE POLICY COMMITTEE, PROMISES TO 'ACCELERATE PROGRESS' ON DIVERSITY
FP - Kevin Carmichael (2021-06-22)
Carolyn Wilkins, the first and only woman to serve as senior deputy governor of the Bank of Canada, begins a three-year stint as one of five external members of the Bank of England’s Financial Policy Committee (FPC) this week.
INVESTORS FOCUS ON CENTRAL BANK SPEAKERS AFTER EXTREME MARKET MOVES
Reuters - Lewis KrauskopfKate DuguidSaqib Ahmed (2021-06-22)
With all eyes on the U.S. central bank this week, some investors are looking to a parade of Federal Reserve speakers to calm market volatility, saying the reaction to the Fed's June meeting was too extreme.
CANADIAN ECONOMIC CLIFF AT THE END OF PANDEMIC SUPPORT IS UNLIKELY: NATIONAL BANK
Better Dwelling - Daniel Wong (2021-06-22)
Many of the generous supports Canada extended during the pandemic are coming to an end. Amongst them, the bank highlights two of the biggest: the Emergency Wage Subsidy, which ends in June; and the Canada Recovery Benefit, which ends in September. Unless extensions are announced, many fear this can be a setback to the recovery. The NBC analysts don’t see it that way.
EQUIVALENCE HOPES FADE AS EU SLAMS UK’S LACK OF COMMITMENT
Bobsguide - Bobsguide (2021-06-22)
“The first path is deciding to work together, with the United Kingdom abiding by its obligations and engaging in good faith. And the second path, is if the United Kingdom continues to act on a unilateral basis.”
BIDEN WILL MEET U.S. FINANCIAL REGULATORS ON MONDAY
Reuters - Reuters (2021-06-21)
President Joe Biden will meet with financial regulators on Monday for an update on the country's financial systems and institutions, press secretary Jen Psaki said on Friday.
FED-FUELED DOLLAR RISES AS BEARS MAKE FOR EXITS
Reuters - Saqib Iqbal AhmedJulien Ponthu (2021-06-21)
The dollar index , which tracks the greenback against six major currencies, was up 0.37% at 92.213, its highest since mid-April. That puts the index on pace for a weekly gain of nearly 2%, its best weekly jump in about 14 months.
BOJ MAY KICK OFF DEBATE AROUND 2023 ON ENDING NEGATIVE RATES - EX-C.BANK EXEC
Reuters - Reuters (2021-06-17)
The Bank of Japan may start debating ways to phase out its extraordinary stimulus programme, such as by ditching negative interest rates, around the time Governor Haruhiko Kuroda's term ends in 2023, said former central bank executive Eiji Maeda.
OPENING STATEMENT BEFORE THE STANDING SENATE COMMITTEE ON BANKING, TRADE AND COMMERCE
BOC - Tiff Macklem (2021-06-17)
Looking more broadly at the economy as a whole, we forecast strong consumption-led growth in the second half of this year as vaccinations progress further and restrictions ease. Fiscal stimulus from the federal and provincial governments will also make an important contribution to growth. Strong foreign demand and higher commodity prices are expected to drive exports and business investment, leading to a more broad-based recovery. In our April MPR, we projected that the economy will grow by around 6½ percent this year, about 3¾ percent in 2022 and 3¼ percent in 2023.
CANADA’S BANKING REGULATOR BOOSTING KEY CAPITAL RESERVE THRESHOLD ABOVE PREPANDEMIC LEVELS
G&M - James Bradshaw (2021-06-17)
Canada’s banking regulator is raising a key threshold for banks’ capital reserves higher than prepandemic levels, rebuilding a buffer that was used to guard against stress in the financial system from the current crisis.
FED EXPECTED TO SIGNAL START OF MONETARY POLICY SHIFT DEBATE
Reuters - Howard Schneider (2021-06-16)
With U.S. inflation rising faster than expected and the economy forecast to grow at its quickest pace in decades this year, some policymakers have begun questioning whether the Fed should continue to keep its benchmark short-term interest rate near zero and leave unchanged a massive bond-buying program put in place to stem the economic fallout from the pandemic.
BRITAIN URGES EU TO EXPEDITE FINANCIAL SERVICES TALKS
Reuters - Huw Jones (2021-06-16)
Britain's finance ministry called on the European Union to open talks on financial services, after the London Stock Exchange on Tuesday urged the bloc to avoid protectionism.
KEY QUESTIONS ABOUT CANADIAN MONETARY POLICY ARE CAUSING CONCERN
G&M - STEVE AMBLER, JEREMY KRONICK, AND WILLIAM B.P. ROBSON (2021-06-15)
Some indicators, however, are less reassuring. Some of the bank’s own “core” inflation measures, which strip out volatile CPI components such as gasoline and food, are also running above 2 per cent. The bank highlights six on its website: CPI-trim, CPI-median, CPI-common, CPIX, CPI-XFET and CPIW. Each has its advantages and disadvantages, but each is meant to get at inflation’s underlying trend, discounting short-term volatility. Hence, the bank can better set monetary policy with an eye toward the medium-term horizon of six to eight quarters, at which point the bank expects inflation to be at the 2-per-cent target.
DELICATE TASK FOR FED: DECIDING WHEN TO PULL BACK ON LOW RATE SUPPORT
Investment Executive - Christopher Rugaber (2021-06-15)
Powell said at the time that he would want to see a “string” of hiring reports showing about 1 million added jobs each month. The job market has yet to reach that total in any month this year, though employers have posted a record-high number of open jobs.
GOVERNOR BAILEY ENCOURAGED BY PROGRESS AROUND ‘CRITICAL INNOVATION’ OF CBDC
Finextra - Finextra (2021-06-14)
“As a central bank we've always recognised the importance of innovation for the global financial system, and we look to support it wherever possible in the safest manner. Of course, the private sector can create technological and commercial innovation, it is a comparative advantage and expertise. But in the public sector, we have a very vital role in enabling and channelling its development so that it can provide efficient but also safe finance for consumers and businesses across the country.”
AMERICAN BANKING LOBBY HITS OUT AT CBDC HYPE
Finextra - Finextra (2021-06-14)
In a statement for the record of a Senate Banking subcommittee hearing, ABA notes that choosing between the various CBDC designs requires “serious and complex policy tradeoffs” and that too often CBDC proponents take a “highlight reel” approach to describing CBDC, “cherry picking all the perceived benefits, while downplaying the serious risks to consumers and our financial system.”
CETA TAKES CENTRE STAGE AT LATEST CANADA, EU SUMMIT
G&M - Andrew Hammond (2021-06-14)
The European Union and Canada are holding a summit in Brussels on Monday and Tuesday, with Prime Minister Justin Trudeau meeting EU counterparts after the NATO and G7 meetings. Centre stage in the discussion is the landmark bilateral trade agreement, the Comprehensive Economic and Trade Agreement, or CETA, which has driven an increase in two-way commerce, including a 15-per-cent boost in EU exports to Canada in 2020 alone.
WHAT'S AT STAKE FOR MARKETS AS DEBT CEILING LOOMS
Reuters - GERTRUDE CHAVEZ-DREYFUSS (2021-06-14)
The debt ceiling is the maximum amount the U.S. government can borrow, as directed by Congress, to meet its financial obligations. When the ceiling is reached, the Treasury cannot issue any more bills, bonds, or notes. It can only pay bills through tax revenues.
IMF SEES LEGAL, ECONOMIC ISSUES WITH EL SALVADOR'S BITCOIN MOVE
Reuters - Rodrigo CamposKarin Strohecker (2021-06-11)
The International Monetary Fund said on Thursday it has economic and legal concerns regarding the move by El Salvador to make bitcoin a parallel legal tender, further clouding the outlook for an IMF-backed program and widening spreads on the country's bonds.
BANK OF CANADA KEEPS IGNORING THE RAGING CANADIAN DOLLAR - WHICH MIGHT BE THE BEST STRATEGY
G&M - G&M (2021-06-10)
The Bank of Canada seems pretty intent on ignoring, as much as possible, the raging Canadian dollar. In most instances, that would be a bad idea. In the current circumstances, it may be good policy.
LAWMAKERS AREN’T READY TO RUBBER-STAMP FED DIGITAL DOLLAR
American Banker - Hannah Lang (2021-06-10)
The Federal Reserve has indicated it would need congressional help if the central bank moves ahead with a plan to create a digital dollar. But lawmakers aren't yet ready to give their stamp of approval.
At a hearing Wednesday, Senate Banking Committee members raised questions about how a Fed-designed digital currency would be structured, how it would complement the private sector and whether a digital dollar is even necessary, among other concerns.
INVESTORS SEEK CLUES ON BANK OF CANADA’S NEXT TAPER: DECISION GUIDE
Bloomberg - Shelly Hagan (2021-06-09)
Investors will be looking for fresh hints from the Bank of Canada this week on its next move to reduce emergency levels of monetary stimulus.
PARIS AND BERLIN LEAD FIGHT TO DILUTE BRUSSELS’ STRICTER BANK CAPITAL RULES
FT - Sam Fleming, Martin Arnold (2021-06-09)
Jörg Kukies, deputy finance minister of Germany, told the Financial Times that the Franco-German proposal was “a pragmatic way of ensuring a truthful and compliant Basel implementation on the one hand and respecting the political mandate of [the EU’s economic and financial affairs council] and G20 for no significant increase in capital requirements as well”.
CLIMATE LOOMS LARGE FOR INCOMING HEAD OF OSFI
G&M - Jeffrey Jones (2021-06-07)
Canada will soon have a new top financial watchdog and the successful candidate will be more of a climate cop than ever before.
MAJOR G7 TAX AGREEMENT ONLY FIRST STEP TOWARD GLOBAL DEAL: FREELAND
CBC - Christian Paas-Lang (2021-06-07)
Finance Minister Chrystia Freeland said Saturday an agreement made by Group of Seven (G7) countries on taxing multinational companies and setting a global minimum corporate tax rate was just a first step toward a global deal.
CHRYSTIA FREELAND HAS THE BLUEPRINT TO REVOLUTIONIZE CANADIAN BANKING — SO LET'S USE IT
FP - Kevin Carmichael (2021-06-07)
The policy is known as “open banking” and it could provide a competitive shock to a banking system whose idea of competition is engaging in price wars over the issuance of government-backed mortgages. The review has been so slow in coming to what many say are foregone conclusions that some have wondered if the big banks are doing their best to stand in the way of progress. Whatever the reason for the slow going, any delay from this point on will have everything to do with Freeland herself, as she now has all the information and context that she needs.
SEC REMOVES CHAIRMAN OF AUDIT WATCHDOG
WSJ - Mark Maurer (2021-06-07)
The PCAOB regulates the audits of publicly traded companies. Congress established it with the Sarbanes-Oxley Act of 2002 following accounting scandals at Enron Corp. and other now-defunct firms. Mr. Duhnke was sworn in as PCAOB chairman in January 2018 under then-President Donald Trump.
The SEC’s new Democratic chairman, Gary Gensler, took control in April. A former banker and regulator, he is expected to be tougher on companies and look to increase investor protections and reporting requirements, for example around disclosures about environmental, social and governance issues.G7 FINANCE MINISTERS MEET IN LONDON TO BROKER GLOBAL TAX DEAL
Reuters - David Milliken (2021-06-04)
Finance ministers from the G7 group of rich nations are meeting in London on Friday for two days of talks aimed at moving closer to a global deal to raise more tax from the likes of Google, Facebook and Amazon.
SAUDI ARAMCO IN TALKS WITH BANKS FOR NEW BOND SALE - SOURCES
Reuters - Staff (2021-06-03)
Saudi Arabian oil group Aramco (2222.SE) is in talks with banks for a U.S. dollar-denominated bond issue, two sources said, seeking to raise money ahead of large commitments for its major shareholder, the Saudi government.
FED EXITS THE CREDIT MARKET IT CHANGED FOREVER
Bloomberg - Brian Chappatta (2021-06-03)
It’s not exactly tapering, but the Federal Reserve is starting the clock on withdrawing the emergency measures it used to support financial markets during the Covid-19 pandemic.
The central bank said late Wednesday that it would start to gradually sell the $13.7 billion portfolio of U.S. corporate debt and exchange-traded funds it amassed through its Secondary Market Corporate Credit Facility, which was created during the worst of the pandemic-inspired market meltdown in March 2020. The facility marked an unprecedented intervention for the Fed because it effectively pledged to plow hundreds of billions of dollars into company debt if no one else would. That backstop, even if it wasn’t fully used, quickly restored investor confidence, led to a ferocious rally in practically every corner of the bond market and encouraged record-breaking amounts of debt sales from investment-grade and high-yield borrowers alike.CHINA'S BANKS ARE BURSTING WITH DOLLARS, AND THAT'S A WORRY
Reuters - Tom WestbrookWinni Zhou (2021-06-02)
A mountain of dollars on deposit in China has grown so large that banks are struggling to loan the currency and traders say it poses a risk to official efforts to control a fast-rising yuan.
END OF AN ERA AS POLOZ EXITS BANK OF CANADA
G&M - DAVID PARKINSON (2021-06-01)
Stephen Poloz had only been Governor of the Bank of Canada for a few months in the late summer of 2013, when he gave a speech that defined his unique communication style and signalled a new era for a traditionally staid institution.
PIERRE POILIEVRE VS MARK CARNEY: A HEATED EXCHANGE ON PIPELINES
FP - Staff (2021-05-31)
Carney, who led the Bank of Canada from 2008 and 2013 and the Bank of England from 2013 to 2020, advised the Liberal federal government on its latest budget and is widely considered to have political aspirations to run for the Liberal party.
AUSTRALIA CENTRAL BANK FACES TAPER PRESSURE AS MORE PEERS SHIFT
Bloomberg - Michael Heath (2021-05-31)
Australia’s central bank is approaching a decision on whether the economy is strong enough for it to join Canada and New Zealand in signaling a move away from emergency mode.
FINANCE DEPARTMENT REPORTS PRELIMINARY DEFICIT OF $314B FOR LAST FISCAL YEAR
Investment Executive - CP (2021-05-31)
The early deficit figure for the 12-month period between April 2020 to March 2021 compares to a deficit of $21.8 billion over the preceding fiscal year.
BANK OF CANADA HAS NO PLANS FOR DIGITAL LOONIE, SAYS DEPUTY TIMOTHY LANE
G&M - Ian McGugan (2021-05-27)
The Bank of Canada is closely monitoring the rise of cryptocurrencies and other digital forms of cash, but has no plans at the moment to launch its own digital loonie, a deputy governor said Wednesday.
WORK ON DIGITAL CURRENCY WELL UNDERWAY, BUT NO NEED TO ISSUE IT JUST YET: BANK OF CANADA
FP - Julie Gordon (2021-05-27)
The Bank of Canada is thinking in more concrete terms about how its digital currency might look and work but it does not currently see a strong case for issuing one, a deputy governor said on Wednesday.
OTTAWA’S DEMAND-HEAVY STIMULUS PLAN POSES PROBLEMS FOR CANADA’S ECONOMY
G&M - Sean Kilpatrick (2021-05-26)
The budget and its stimulus plan certainly didn’t ignore measures to fuel growth in labour supply (most notably, the national child care plan) and small-business investment and innovation (such as the Canada Digital Adoption Program). But the vast bulk of spending in the package over the next year continues to be targeted at wage subsidies and income supports for workers and employers hit by COVID-19 shutdowns and restrictions. The effect of these programs is, ultimately, to keep money flowing into consumers’ pockets – which keeps consumer demand humming.
THE BANK OF CANADA IS TRYING TO GO GREEN
FP - Kevin Carmichael (2021-05-26)
The Bank of Canada is also ramping up its research agenda. The FSR included the results of a deep study of natural disasters in Canada based on data that dates to 1900. Using artificial intelligence, the central bank determined that about 40 per cent of the country’s total household debt is held by households living in parts of the country that face “high exposure” to wildfires and other such catastrophes.
AS INTEREST RATES HIT BOTTOM, DEBT DOES MATTER, SAYS BARCLAYS
Reuters - SUJATA RAO (2021-05-26)
With global borrowing costs probably as low as they can go, high debt levels will start to matter more in coming years, a Barclays study found, highlighting Brazil as the country at greatest risk of a hit to growth and debt sustainability.
OSC BEGINS CRYPTO CRACKDOWN
Investment Executive - James Langton (2021-05-26)
The crackdown on unregulated crypto trading in Canada has begun, with the Ontario Securities Commission (OSC) bringing allegations against a Seychelles-based firm for failing to heed the regulator’s warning to get registered.
BANK OF CANADA REMINDS US OF MORE THINGS TO WORRY ABOUT
CBC - Don Pittis (2021-05-25)
That's why the first and biggest risk outlined by the bank in its report was "a large decline in household income and house prices" caused by an external trigger event. It is hard to be sure what form such a trigger event could take. Macklem referred at one point to a "sharp repricing of risk." Such an event might lead to, say, a sudden rise in global interest rates, a stock market crash or a weakening of global trade. Maybe even the collapse of bitcoin.
THE BANK OF CANADA RELEASES THE FINANCIAL SYSTEM REVIEW
BOC - BOC (2021-05-20)
The Financial System Review (FSR) summarizes the Governing Council’s judgment on the main vulnerabilities and risks to the stability of the Canadian financial system and highlights the efforts of the Bank and other Canadian and international regulatory authorities to mitigate those risks. After a brief survey of macrofinancial conditions, the principal vulnerabilities and risks are examined.
BANK OF CANADA CALLS CRYPTO ASSETS AN EMERGING VULNERABILITY
Bloomberg - Erik Hertzberg (2021-05-20)
The Bank of Canada said volatility in cryptocurrency assets is an emerging vulnerability to the country’s financial system, a day after a major selloff in the sector.
THE BANK OF CANADA’S GOVERNING COUNCIL HAS A DIVERSITY PROBLEM, AND A GREAT OPPORTUNITY TO FIX IT
G&M - DAVID PARKINSON (2021-05-18)
When Bank of Canada Governor Tiff Macklem delivered a speech last week championing diversity and inclusion, he took a moment to deliver a mea culpa from the upper echelon of the central bank.
THE BANK OF CANADA, GOVERNED BY FIVE WHITE MEN, HAS A LONG WAY TO GO WITH MACKLEM NEWLY CHAMPIONING DIVERSITY
FP - Kevin Carmichael (2021-05-18)
The title of his remarks was “Including everyone helps us all.” Macklem talked about the importance of diversity, noting that research on the question is settled: strategy and decisions made by leadership teams that feature women, racialized individuals, and disabled people do better than C-suites and boards of directors that are dominated by white men. “Diverse and inclusive groups make better decisions,” Macklem said. “That’s because they can avoid groupthink that happens when decision-makers all have similar backgrounds and approach problems the same way.”
BANK OF CANADA SAYS QE CAN WIDEN WEALTH INEQUALITY, IS PROBING ITS EFFECTS
FP - Julie Gordon and David Ljunggren (2021-05-18)
The Bank of Canada said on Thursday that some of the monetary policy tools it is using to address the COVID-19 pandemic, such as quantitative easing (QE), could widen wealth inequality and that it was looking closely at the issue.
THE BANK OF CANADA RELEASES THE FINANCIAL SYSTEM REVIEW
BOC - BOC (2021-05-17)
The Financial System Review will be released on Thursday, May 20, 2021. The Financial System Review (FSR) summarizes the Governing Council’s judgment on the main vulnerabilities and risks to the stability of the Canadian financial system and highlights the efforts of the Bank and other Canadian and international regulatory authorities to mitigate those risks. After a brief survey of macrofinancial conditions, the principal vulnerabilities and risks are examined.
BAILEY: COMBINATION OF REFORMS NEEDED TO TACKLE ‘DANGEROUS’ MONEY MARKET FUNDS
Bobsguide - Tom Lemmon (2021-05-13)
Bank of England governor Andrew Bailey has said that money market funds (MMFs) proved in the early stages of the pandemic that they were “not sufficiently resilient”. That is despite efforts to increase the stability of MMFs after their involvement in the demise of Lehman Brothers and the crash in 2008.
INCLUDING EVERYONE HELPS ALL OF US
BOC - Tiff Macklem (2021-05-13)
Diversity and inclusion are core to our success as a central bank that serves all Canadians.
CHRYSTIA FREELAND DEFENDS WAGE SUBSIDY AS OPPOSITION ACCUSES LIBERALS OF ‘SHOWERING THEIR RICH BAY STREET FRIENDS’
G&M - BILL CURRY AND PATRICK BRETHOUR (2021-05-12)
Conservative and NDP MPs questioned the minister about a Globe and Mail investigation, which found that hundreds of publicly traded companies, or their wholly owned subsidiaries, together received at least $3.6-billion in Canada Emergency Wage Subsidy payments as of late January. Among those companies were some of the biggest names in corporate Canada, as well as dozens of hedge funds and wealth managers.
PLAYING CATCH-UP ON SUSTAINABLE FINANCE, OTTAWA STRIKES NEW ‘ACTION COUNCIL’
G&M - Adam Radwanski (2021-05-12)
The federal government is set to launch a public-private advisory body aimed at accelerating the adoption of sustainable-finance measures, on which Canada risks lagging behind its trading partners.
FORMER UK PM CAMERON DETAILS EXTENSIVE GREENSILL LOBBYING
Reuters - Reuters (2021-05-12)
Former British Prime Minister David Cameron repeatedly contacted senior ministers over a four-month period in 2020 to lobby for the now-failed, supply-chain finance firm Greensill Capital, according to documents published on Tuesday.
CARNEY URGES LIBRA-LIKE RESERVE CURRENCY TO END DOLLAR DOMINANCE
Bloomberg - Brian Swint (2021-05-12)
BIG BANKS ON DEFENSE AFTER FED SIDES WITH RETAILERS ON DEBIT SWIPE FEES
American Banker - Brendan Pedersen, Kevin Wack (2021-05-12)
For nearly a decade, the Federal Reserve avoided choosing sides in the protracted, high-stakes dispute between banks and retailers over debit card fees.
HOW MALAYSIA IS SEEKING TO RECOVER BILLIONS OF DOLLARS MISSING FROM 1MDB
Reuters - Reuters (2021-05-11)
1MDB raised billions of dollars in bonds, ostensibly for investment projects and joint ventures, between 2009 and 2013.
CANADA KICKS OFF ITS FIRST U.S. DOLLAR BOND SALE SINCE PANDEMIC
Bloomberg - Esteban Duarte (2021-05-11)
The North American country plans to sell five-year bonds in the first benchmark-sized transaction in the currency since January 2020, Bloomberg data show. The bonds, which are expected to be priced Tuesday, are being marketed at around 8 basis points over U.S. Treasuries, according to people familiar with the matter.
LESSONS FROM 2009 HELPED BOC AVOID LIQUIDITY STRESS IN 2020
Investment Executive - James Langton (2021-05-10)
The central bank published a paper examining the operation of Canada’s electronic funds transfer system for large payments, the Large Value Transfer System (LVTS), during the pandemic.
FEDERAL BUDGET DEBT BURDEN PROJECTIONS RELY ON ROSY ASSUMPTIONS
G&M - Patrick Brethour (2021-05-07)
But that comforting scenario rests on some optimistic to highly optimistic long-term assumptions about productivity growth, economic expansion, interest rates and inflation. If all of those factors don’t turn out as favourably as the Finance department is forecasting, then that steady march to stability could instead turn into a permanently elevated debt burden – or even an upward spiral.
LIBERAL BUDGET UNDERESTIMATES SIZE OF FEDERAL DEFICITS, WILL LEAD TO DECADES OF HIGHER DEBT: PBO
G&M - Bill Curry (2021-05-06)
The Liberal government’s 2021 budget underestimates the likely size of federal deficits by about $5.6-billion a year and puts Ottawa on a long-term path of higher debt, says Parliamentary Budget Officer Yves Giroux.
INFLATION IS MORE OF A THREAT THAN THE FED SAYS
WSJ - Opinion (2021-05-05)
Regarding Mickey D. Levy and Michael D. Bordo’s “The Fed in the Sand as Inflation Threatens” (op-ed, April 27): I have been calling on Fed Chairman Jerome Powell to release his plan to curb the effects of inflation for several months. Last month, I finally heard back from him. He told me that he doesn’t want inflation that substantially exceeds 2%, or inflation for a prolonged period.
JANET YELLEN JUST SAID INTEREST RATES MAY NEED TO RISE TO PREVENT THE ECONOMY OVERHEATING AMID STIMULUS
FP - Ann Saphir and Dan Burns (2021-05-05)
Overall the programs, which include stepped-up spending on infrastructure, childcare and education, will make a “big difference” to inequality, Yellen said.
YELLEN CLARIFIES INFLATION REMARK, SEES NO NEED FOR FED TO HIKE
Bloomberg - Christopher Condon and Saleha Mohsin (2021-05-05)
Discover what’s driving the global economy and what it means for policy makers, businesses, investors and you with The New Economy Daily. Sign up here
THE FED BOARD AGREES NEVER TO DISAGREE
WSJ - Judy Shelton (2021-05-05)
In the aftermath of an economic and financial challenge that Federal Reserve Chairman Jerome Powell recently likened to Dunkirk—the urgent rescue of British and other Allied troops from France in World War II—there’s a remarkable uniformity of opinion on the Federal Reserve Board of Governors. Apparently, they all agree on the appropriateness of the Fed’s monetary-policy decisions. That’s what worries me.
HOW DEFERRING THE OAS JUST GOT A LITTLE MORE LUCRATIVE
G&M - Patrick Brethour (2021-05-04)
In 2015, the federal Liberal platform committed the party to reversing a Conservative plan to gradually raise the retirement age (or at least the eligibility age for Old Age Security payments) to 67 from 65, arguing that seniors needed the money more than Ottawa.
THE BANK OF CANADA MIGHT HAVE TO TIGHTEN ITS MESSAGING TO ALLAY WORRIES ABOUT INFLATION
FP - Kevin Carmichael (2021-05-04)
“I would say, ‘Governor, I’m sure glad we’re learning from the lessons of history,’” Easter, a Liberal, said during Macklem’s testimony at his committee on April 27. “I’m one, and there may be others on this committee, who faced a 23-per-cent interest rate in the 1980s and I’ll tell you we paid for that for a very long time.”
BANK OF CANADA IS “DISCREDITING” ITS OWN INFLATION RESEARCH, PUZZLING ECONOMISTS
Better Dwelling - Stephen Punwasi (2021-05-04)
The BoC’s April Monetary Policy Review (MPR) said inflation data would be unreliable. More specifically, the three measures — CPI-trim, CPI-median, and CPI-common would be unreliable. Arseneau says, “last week’s imbroglio [embarrassing situation] over inflation in Canada comes at a bad time.”
THE BANK OF CANADA MIGHT HAVE TO TIGHTEN ITS MESSAGING TO ALLAY WORRIES ABOUT INFLATION
FP - Kevin Carmichael (2021-05-03)
The combination of the Bank of Canada’s loose monetary policy and the federal government’s massive spending is a necessary response to an epic catastrophe. There’s an echo of the 1960s and 1970s, a period that inspired the music of Leonard Cohen, Joni Mitchell and Neil Young, but ended in one of the worst recessions in Canadian history.
DAVID DODGE’S BIG ISSUE WITH THE BUDGET ISN’T DEBT, BUT LACK OF GROWTH
G&M - DAVID PARKINSON (2021-04-29)
David Dodge has had a few days to take a look at the budget that the federal Liberal government unveiled last week. He’s not a fan – of the math or the substance.
U.S. KEEPS ULTRA-LOW INTEREST RATE POLICIES IN PLACE, BUT NODS TO 'STRENGTHENED' RECOVERY
G&M - Reuters (2021-04-29)
"Amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened," the U.S. central bank said in a unanimous policy statement at the end of a two-day meeting.
FEDERAL PLEDGE TO PUBLICLY DISCLOSE WHO OWNS SOME PRIVATE COMPANIES CATCHES PROVINCES OFF-GUARD
CBC - Ivan Angelovski, Zach Dubinsky (2021-04-29)
That's been the case in British Columbia, where a government-commissioned report estimated money launderers parked $5.3 billion in real estate in 2018 alone — enough that it drove up housing prices by five per cent.
BANK OF CANADA UNFAZED BY SHORT-TERM INFLATION INCREASE
G&M - Mark Rendell (2021-04-28)
Bank of Canada Governor Tiff Macklem said the central bank is not concerned about a temporary spike in inflation that is expected to take Consumer Price Index growth to around 3 per cent in the coming months.
BANK OF CANADA JOINS VOLUNTARY INITIATIVE TO STUDY INDIGENOUS ECONOMIC ISSUES
G&M - MARK RENDELL AND WENDY STUECK (2021-04-28)
The Bank of Canada is looking to improve how it researches and analyzes economic issues relating to Indigenous communities as part of a joint initiative with the central banks of New Zealand and Australia.
BANKING REGULATOR TO SHIFT FOCUS TO TECHNOLOGY, CLIMATE RISKS
G&M - James Bradshaw (2021-04-28)
New threats that increasingly keep banking regulators up at night present a fresh set of challenges because they fall outside the traditional boundaries of financial risk management. They include global threats such as climate change, fast-moving innovations in technology and cybersecurity and the emergence of new asset classes such as crypto assets – an uncharted and largely unregulated area for financial institutions that is “growing in importance,” Mr. Gully said.
CANADA AVOIDS ELECTION WITH LAWMAKERS BACKING TRUDEAU BUDGET
Bloomberg - Kait Bolongaro (2021-04-27)
In a Monday evening vote, lawmakers from the New Democratic Party backed Finance Minister Chrystia Freeland’s plan to help the Canadian economy recover from its pandemic-induced losses. The vote in the House of Commons was 178 to 157 in favor.
INFLATION FORCES THE BANK OF CANADA’S HAND AHEAD OF FED AND ECB
Bloomberg - Theophilos Argitis and Ye Xie (2021-04-23)
In a surprise move, it accelerated the timetable for a possible interest-rate increase and began paring back its bond purchases on Wednesday. That made Canada the first major economy to signal its intent to reduce emergency levels of monetary stimulus.
It’s a turn in policy by Governor Tiff Macklem that shows there’s a limit to how much he’s willing to test the upper boundaries of inflation, with new forecasts showing the central bank expects the biggest persistent overshoot of its 2% target in at least two decades. The question is whether Canada’s situation is unique, or foreshadowing the start of a global exit from stimulus.WITH NEW PROJECTIONS, BANK OF CANADA SIGNALS IT’S WILLING TO BE FLEXIBLE ON INFLATION TARGET IN PURSUIT OF FULL RECOVERY
G&M - DAVID PARKINSON (2021-04-22)
Canada’s inflation-targeting central bank just acknowledged that inflation is headed above its 2-per-cent target in the post-COVID-19 recovery. And you know what? It’s okay with that.
BANK OF CANADA OFFERS FRESH HINTS THAT INTEREST RATES WILL RISE NEXT YEAR AS ECONOMY SURGES
CBC - Don Pittis (2021-04-22)
New signs of a strong recovery — including the bank's prediction of a stunning global growth rate of nearly seven per cent this year — plus indications that the underlying foundation of the Canadian economy has not suffered serious damage from the COVID-19 pandemic, mean the central bank is scaling back on monetary stimulus.
CENTRAL BANKS AND GOVERNMENT OUT OF TOUCH WITH MAIN STREET WHEN IT COMES TO RISING COST OF LIVING
FP - Martin Pelletier (2021-04-22)
Nothing makes our central bankers, academics and government officials sound more out of touch with Main Street these days than when they talk about low levels of inflation. The problem is that ultra-low interest rate policies justified by CPI tracking don’t seem to help much when income levels are stagnating and asset prices are surging.
CANADIAN DOLLAR JUMPS MOST IN 10 MONTHS ON ASSET PURCHASE CUTS
Bloomberg - Susanne Barton (2021-04-22)
“I thought the bank might try to complain about or argue against CAD strength -- it didn’t,” Anderson said. “The bank merely made the factual statement that CAD had rallied alongside commodity prices. Based on that, I’m slightly less worried about the BOC trying to push back against CAD strength in the future.”
BUDGET 2021 IS A VOTE-BUYING MULTIYEAR MASSIVE SPENDING BINGE THAT CANADA IS UNLIKELY TO AFFORD
G&M - David Rosenberg (2021-04-21)
There was a time in this fair land when a federal budget was an economics document. These days, it is a social policy document aimed to buy votes. It’s actually quite sad.
THE U.S. HAS A CLEAR WARNING FOR EMERGING MARKETS
Bloomberg - Daniel Moss (2021-04-21)
The Treasury Department has a warning for the emerging world: The export-your-way-to-prosperity template has fallen out of favor. Once thought to be in U.S. interests — as a way of getting plentiful cheap goods — this model of development is now meeting more skepticism. The message for Asia should be loud and clear, even if some economies got a pass last week.
In its semiannual assessment of trading partners’ foreign-exchange policies, Treasury stopped short of labeling Taiwan, Vietnam and Switzerland as currency manipulators, even though they met the criteria. In normal times, they would have been branded with a Scarlet M for deliberately holding their currencies down. But officials couldn’t determine whether their less-than-ideal practices were done to seek a trade advantage, or simply to buttress markets and alleviate recession. The pandemic skewed capital flows globally, and many countries — the U.S. among them — responded in kind. This time, the trio got away with a rap on the knuckles. The softer approach is a shift from the Trump administration, which tagged Hanoi and Bern as manipulators, and admonished a bunch of others, including India, Thailand, Singapore and South Korea.FEDERAL BUDGET 2021: LIBERALS’ FISCAL ANCHOR BANKS ON RAPID PANDEMIC RECOVERY
G&M - Mark Rendell (2021-04-20)
The federal government is pinning its new “fiscal anchor” to a rapid postpandemic recovery, with economic growth expected to put the government’s debt-to-GDP ratio on a downward trajectory over the next few years, despite continuing deficits.
Ottawa added more than $350-billion to its accumulated debt last year, and expects to run another deficit of $154.7-billion this year. Federal debt now stands at $1.08-trillion or 49 per cent of GDP, up from $721-billion or 31.2 per cent before the pandemic.
Heading into Monday’s budget,
Loading... economists and business groups were calling for the government to adopt a fiscal anchor – that is a target, such as a debt-to-GDP ratio, to moderate deficit spending and debt accumulation. The government responded with a loosely defined commitment to unwind its emergency spending and reduce the size of its debt relative to the size of the economy “over the medium term.”CENTRAL BANKS TO POUR MONEY INTO ECONOMY DESPITE SHARP REBOUND
Bloomberg - Bloomberg (2021-04-20)
The outlook suggests officials still want to guarantee the recovery from last year’s coronavirus recession by maintaining ultra-low borrowing costs and asset-buying programs. That may require them to accept any accompanying bounce in inflation.
HOW THE CANADIAN GOVERNMENT’S SUPERSIZED BUDGETS INFLATE THE PROPERTY BUBBLE
Better Dwelling - Stephen Punwasi (2021-04-20)
Canadian real estate prices are rising at rates even the banks are warning about. There’s a lot of reasons this is happening, but one rarely discussed is the supersized borrowing from the Government of Canada (GoC). A lot of cash was needed during the pandemic, but Canada’s discretionary spending topped the G20. To help facilitate this spending, the Bank of Canada (BoC) made use of quantitative ease (QE). The unconventional policy tool’s use is debated, but its impact is well established.
IF I WERE FINANCE MINISTER ...
FP - Jack M. Mintz (2021-04-19)
If I were finance minister, I’d be asking myself the following question: With a recovery just getting going following a deep recession, should I act like Marc Lalonde in 1983 or Paul Martin in 1994? Or should I chart my own course?
TRUDEAU WILL ADD TO RECORD DEBT WITH FIRST PANDEMIC BUDGET
Bloomberg - Kait Bolongaro and Theophilos Argitis (2021-04-19)
Justin Trudeau is set to unveil a vision for Canada’s post-pandemic recovery that will double as an election platform, heavy on new spending and assurances the mounting debt is affordable.
CANADA’S ANTI-MONEY LAUNDERING AGENCY STRUGGLES TO IMPLEMENT REFORMS AS EMPLOYEES WORK FROM HOME
G&M - Vanmala Subramaniam (2021-04-15)
Internal documents from the Financial Transactions and Reports Analysis Centre of Canada (FinTRAC) obtained through freedom of information legislation paint a picture of substantial disruption at the agency, especially in the first few months of the pandemic, when hundreds of employees were abruptly forced to work from home.
CENTRAL BANKING’S GREEN LIMITS SPARK LEGAL DEBATE IN SWEDEN
Bloomberg - Bloomberg (2021-04-15)
How should a central bank respond to global warming? In Sweden, a body created to monitor government efforts to fight climate change says the law that guides monetary policy needs a serious overhaul.
Cecilia Hermansson, the vice chair of the Swedish Climate Policy Council, is advising the government to include environmental considerations in the Riksbank Act, which is currently under review. She also says an existing proposal to amend the law doesn’t go nearly far enough.BIDEN IMPOSES TOUGH NEW SANCTIONS ON MOSCOW
FT - Henry Foy, Katrina Manson, Michael Peel (2021-04-15)
On Wednesday, the US for the first time formally blamed SVR, Russia’s foreign intelligence service, for the SolarWinds hack, which affected at least nine federal agencies and 100 companies. One senior administration official told reporters the hack gave Russia “the ability to spy on or potentially disrupt more than 16,000 computer systems worldwide”.
FED’S POWELL SAYS U.S. ECONOMY AT AN 'INFLECTION POINT'
G&M - Reuters Video (2021-04-13)
According to Federal Reserve Chair Jerome Powell, the U.S. economy is at an "inflection point" with expectations that growth and hiring will pick up speed in the months ahead, but some risks remain, particularly any resurgence in the coronavirus pandemic.
EUROPE IS HEADING TOWARD A NEW FINANCIAL CRISIS
Bloomberg - Editorial Board (2021-04-12)
Europe faces a predicament. Even as it struggles to contain the Covid-19 pandemic, it’s setting itself up for another crisis — this one financial. To ensure the viability of the common currency at the heart of the European project, the EU’s leaders will have to cooperate in ways they’ve so far resisted.
ZIMBABWE PRESIDENT WARNS OF CRACKDOWN ON FINANCIAL INDUSTRY
Bloomberg - Ray Zdlovu (2021-04-12)
Mnangagwa has previously issued warnings to private companies he blames for undermining his efforts to turn around an economy plagued by annual inflation of 241% and foreign-currency shortages. Last year, his government closed the Zimbabwe Stock Exchange for five weeks and singled out the largest mobile operator, Econet Wireless Zimbabwe Ltd., for undermining the nation’s currency through its mobile money service
BANK OF CANADA RELEASES RESULTS FROM CONSULTATIONS ON INFLATION AND MONETARY POLICY
BOC - BOC (2021-04-12)
Most respondents also said they would prefer an approach that balances the level of interest rates to benefit both savers and borrowers. Additionally, the majority viewed inflation targeting as the most easily understood approach.
INTRODUCTORY REMARKS BY SUPERINTENDENT JEREMY RUDIN AT TORYS LLP ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) SESSION VIA WEBCAST, APRIL 7, 2021
OSFI - OSFI (2021-04-12)
For OSFI, our focus in these matters is prudential. That is to say that our unique role is to ensure that Canadians continue to enjoy financial stability as climate-related risks manifest themselves. This is a very important role, and one that we take very seriously, especially as we are the only arm of the Government of Canada that is equipped to meet this prudential responsibility.
WHATEVER WE MAY THINK OF MODERN MONETARY THEORY, ITS DAY IN THE SUN HAS ARRIVED
G&M - DAVID PARKINSON (2021-04-12)
Last fall, as Chrystia Freeland began laying the groundwork for a postpandemic recovery strategy that would heap more debt onto the federal government’s already immense pile, she felt obliged to assure Canadians that, no, she hasn’t invited a three-initialled economic bogeyman to live under our bed.
CAROLYN WILKINS APPOINTED TO BANK OF ENGLAND COMMITTEE OVERSEEING BRITAIN’S FINANCIAL STABILITY
G&M - Mark Rendell (2021-04-09)
Carolyn Wilkins, the former second-in-command at the Bank of Canada, has been appointed to the Bank of England committee that oversees financial stability in Britain.
FIGHTING THE COVID-19 PANDEMIC LED TO RISING NATIONAL DEBT. NOW WHAT?
WSJ - WSJ Video (2021-04-08)
The federal government has been borrowing a lot of money to fight the pandemic. But with national debt rising, lawmakers disagree on how to deal with that debt and pay for priorities going forward. WSJ’s Gerald F. Seib explains. Photo illustration: Emma Scott
BEWARE THE SIREN SONG OF MODERN MONETARY THEORY
FP - Mark Zelmer (2021-04-07)
The massive increase in government spending in Canada and around the world in response to the COVID-19 pandemic has been accompanied by a siren song in the form of a new economic theory: “Modern Monetary Theory,” or MMT for short. But as we begin to emerge from the acute phase of the pandemic we need to turn a deaf ear to that song. Now that inflation concerns are beginning to stir it is hard to imagine governments raising taxes or cutting spending anytime soon to keep inflation in check — yet that’s how MMT advocates would control inflation, with what traditionally have been regarded as fiscal policies rather than the customary monetary tools of interest rates and liquidity measures.
YELLEN GLOBAL MINIMUM TAX IS STEP TOO FAR IN D.C
Reuters - Gina Chon (2021-04-07)
That would put America’s headline rate above many Western nations. Biden’s blueprint also includes a minimum tax of 21% on the income U.S. companies earn on assets like patents and trademarks outside the United States, up from the current floor of around 10%.
SHUTTERING OF NATIONAL SECURITIES REGULATOR CAME AS NO SURPRISE TO INDUSTRY
Investment Executive - Rudy Mezzatta (2021-04-07)
Last week, the CMAIO, which was established in 2015 to guide the launch of a national capital markets regulatory authority, put its operations on pause and laid off its staff. The organization said that it could resume its work in the future “when there is greater certainty around cooperative system launch timelines.”
JANET YELLEN CALLS FOR GLOBAL MINIMUM CORPORATE TAX TO END '30-YEAR RACE TO THE BOTTOM'
FP - Reuters (2021-04-06)
Yellen said it was important to make sure governments “have stable tax systems that raise sufficient revenues in essential public goods and respond to crises, and that all citizens fairly share the burden of financing government.”
DON'T BE ALARMED AS THE BANK OF CANADA BEGINS ITS COVID WITHDRAWAL
FP - Steve Ambler, Jeremy M. Kronick and William B.P. Robson (2021-04-06)
On March 23, the Bank of Canada announced the upcoming suspension of some of its major asset-purchase programs. This is good news. Financial stresses at the beginning of the pandemic a year ago led the bank to buy the debt of provincial governments and private companies. Those stresses are now in the past and Canadians should welcome the bank’s retreat from a role fraught with economic and political risks.
FORMER CENTRAL BANK GOVERNOR TO PLAY PROMINENT ROLE AT LIBERAL CONVENTION
G&M - Joan Bryden (2021-04-05)
Mark Carney, long touted as a potential Liberal leader one day, will be a keynote speaker at the federal party’s convention later this week.
EXPECT TWEAKS NOT BIG CHANGES AS THE BANK OF CANADA GETS CLOSER TO NEW INTEREST RATE POLICY
FP - Kevin Carmichael (2021-04-01)
In 2019, the Reserve Bank of New Zealand, which in 1989 became the first central bank to adopt a formal inflation target, was told by Jacinda Ardern’s government to include “maximum sustainable employment” as an objective. Earlier this year, Ardern added “sustainable house prices, including dampening investor demand for existing housing” to governor Adrian Orr’s agenda.
BIDEN SAYS $2 TRILLION JOBS PLAN RIVALS THE SPACE RACE IN ITS AMBITION
Reuters - Steve Holland, Jarrett Renshaw (2021-04-01)
“It’s a once-in-a-generation investment in America, unlike anything we’ve seen or done since we built the interstate highway system and the space race decades ago,” Biden said in unveiling the program in Pittsburgh.
BANK OF CANADA GOVERNOR SEES ‘WORRYING’ SIGNS IN HOUSING MARKET
Bloomberg - Ari Altstedter and Erik Hertzberg (2021-04-01)
The Bank of Canada is seeing “worrying” signs that some Canadians are taking on too much debt to buy into the nation’s hot housing market.
In an interview with the Financial Post, Governor Tiff Macklem said there is evidence that loan levels relative to home values are growing -- an indication that some borrowers could be overextending. He also warned people have begun to make purchases based on the belief prices will continue rising. “Canadians are stretching and that is worrying.” Macklem said. “If Canadians are basing their decisions on the kinds of price increases that we’ve seen recently are going to continue indefinitely, that would be a mistake. They’re not sustainable.” At the same time, Macklem indicated the central bank can do little given interest rates need to stay low to support the recovery.COVID FELINE/CANINE TAX IN EFFECT JUNE 13 2021
BNTV - Poussin Boots (2021-03-31)
CIBC clients are exempt from the Covid-19 pet owners tax. In effect from March 31st, municipal authorities require Canadian's to adhere to strict lockdown measures with the excpetion of pet owner that must walk their pets regularly. Therefore, dog and cat owners have been exempt from curfews. Consequently, a Canadian pet owners will be required to pay a dog and cat tax that would require every cat owner in to pay $40 (about $35) a year. But fear not, because you get a cat licence, complete with a picture of your cat, to show the tax man that you and your kitty are law-abiding citizens. CIBC clients are exempt because they have decided to compensate clients that own pets.
BANKER WAS RECENTLY ARRESTED FOR BRIBING $100,000
G&M - Andrew Willis (2021-03-31)
The federal government and seven provinces and one territory are shutting down the organization charged with creating a national securities regulator due to waning political support for the project in jurisdictions such as Ontario and British Columbia.
FED OFFICIAL SAYS BANK WON’T KEEP INTEREST RATES LOW TO FUND FOR GOVERNMENT DEFICITS
G&M - Howard Schneider (2021-03-29)
The Federal Reserve won’t bend its interest rate or bond-buying policies to help finance the federal government’s rising deficits, Christopher Waller said on Monday in his debut speech as a member of the U.S. central bank’s board of governors.
‘ARE WE GOING TO BE ABLE TO PULL THIS OFF?’: HOW THE BANK OF CANADA DOUSED A FINANCIAL FIRE LAST SPRING
G&M - MARK RENDELL AND DAVID PARKINSON (2021-03-27)
It was Mar. 27, 2020, and the central bank had just unveiled a plan to buy Canadian government bonds at the astounding pace of at least $5-billion a week.
FREELAND SAYS FEDERAL BUDGET WILL BE TABLED APRIL 19
G&M - Bill Curry (2021-03-24)
Finance Minister Chrystia Freeland announced Tuesday that the next federal budget will be tabled on April 19.
BANK OF CANADA TO END PROVINCIAL, CORPORATE BOND BUYING PROGRAMS
G&M - Mark Rendell (2021-03-24)
In a speech on Tuesday, deputy bank governor Toni Gravelle said the central bank will let its commercial paper, provincial bond and corporate bond buying programs expire in the coming months, now that debt markets are functioning normally. It will also end two sales and repurchase agreement – or “repo” – programs launched last March to pump cash into financial institutions that faced a liquidity crunch early in the pandemic.
BANK OF CANADA WORKING HARD TO AVOID A TAPER TANTRUM WHEN IT EVENTUALLY SLOWS GOVERNMENT BOND PURCHASES
FP - Kevin Carmichael (2021-03-24)
“I want to be clear here: moderating the pace of purchases while adding to our holdings would simply mean that we are still adding stimulus through QE, but at a slower pace,” Gravelle said. “It would not mean we are removing stimulus. We would be easing our foot off the accelerator, not hitting the brakes.”
ADVANCING A MORE RESILIENT AND PROPORTIONAL BANKING REGULATORY FRAMEWORK IN CANADA
OSFI - Press Release (2021-03-24)
The Office of the Superintendent of Financial Institutions (OSFI) plays an essential role in building and preserving resiliency in Canada’s financial system. OSFI’s commitment to implementing the international Basel III Framework has strengthened Canadian banks and improved their ability to handle financial shocks, so they can continue to support economic growth while remaining competitive.
YELLEN NOW OPEN TO U.S. BANK DIVIDEND PAYOUTS, STOCK BUYBACKS
G&M - ANN SAPHIR AND DAVID LAWDER (2021-03-24)
U.S. Treasury Secretary Janet Yellen on Wednesday said U.S. banks look healthy enough to be allowed to pay dividends and repurchase stock, an updated view that reflects top economic officials’ growing confidence in the recovery from the coronavirus pandemic.
THOUSANDS OF CRA ACCOUNTS AFFECTED BY CERB-RELATED HACKING
G&M - Peter Brethour (2021-03-22)
Chris Chezepock thought he was making a simple call to unlock his online taxpayer account when he rang up the Canada Revenue Agency on Wednesday morning.
THE CASE AGAINST STIMULUS: WHY THE TYPICAL RESPONSE MAY BACKFIRE
G&M - Patrick Brethour (2021-03-19)
Consumers pare back spending as they either lose their jobs, or worry about the prospect of unemployment. That hurts sales at businesses, which then cut back on payroll, and those workers then reduce their spending. And for 80 years, the typical political response to myriad typical recessions has been to dump a lot of money into the economy to break that cycle of misery.
CANADA’S INFLATION RATE EDGES HIGHER, SETS STAGE FOR JUMP IN COMING MONTHS
G&M - Mark Rendell (2021-03-19)
Canada’s inflation rate edged up in February on rising gasoline prices, coming in below analysts’ estimates but setting the stage for a jump in consumer price index growth in the coming months.
CAPITAL CALLS: A TALE OF TWO CENTRAL BANKS
Reuters - Staff (2021-03-19)
Turkey is paying for past errors that cost it credibility and let inflation accelerate to nearly 16%, over three times its target. In the UK, prices have been rising too slowly rather than too fast. And even if they overshot for a bit, public and market expectations of inflation remain firmly anchored. The contrast explains why using monetary policy to support economic recovery is a luxury not available to all. (By Swaha Pattanaik)
CANADIAN’S SPYING TRIAL IN CHINA ENDS AFTER JUST TWO HOURS
Bloomberg - Bloomberg (2021-03-19)
The trial of a Canadian man detained in China since late 2018 on espionage charges has ended after about two hours, a lawyer said, one day after relatives pleaded for his release.
CHINA RAISES STAKES FOR U.S. WITH TRIALS IN HUAWEI FEUD
Bloomberg - Staff (2021-03-18)
Michael Spavor and Michael Kovrig will face their first court hearings Friday and Monday respectively, Canadian Foreign Minister Marc Garneau said in an emailed statement, adding that diplomats have requested to attend. “We believe these detentions are arbitrary, and remain deeply troubled by the lack of transparency surrounding these proceedings,” Garneau said.
POWELL FACES TOUGH CAMPAIGN TO CONVINCE TRADERS OF FED’S RESOLVE
Bloomberg - Emily Barrett (2021-03-18)
The central bank envisages keeping rates near zero to the end of 2023 despite a significantly brighter assessment of growth and higher inflation over the near term. After the release, traders trimmed some of the more-aggressive positioning they’ve been building for a “lift-off” by earlier in 2023.
CHINESE ECONOMY: BEIJING’S WAR ON THE CREDIT BOOM
FT - Tom Mitchell (2021-03-18)
Like many small businesses across China, Zheng Weijun’s freight company had struggled to obtain credit from the state-dominated banking system. But in 2018 the 12-lorry business discovered Fincera, a peer-to-peer platform in Hebei province that collected money from retail investors starved of returns and channelled it to borrowers, mainly small trucking and logistics companies.
CRA LOCKS OUT OVER 800,000 ONLINE ACCOUNTS — HERE'S WHAT TO KNOW
CBC - Ryan Patrick Jones (2021-03-17)
CRA's move comes in the middle of one of the most complicated tax seasons in recent memory, as millions of Canadians prepare to file taxes after receiving COVID-19 benefits.
BANK OF CANADA SEEN CUTTING BOND PURCHASES IN APRIL AS PEAK ISSUANCE PASSES
FP - Fergal Smith (2021-03-17)
A reduction of purchases by the BoC could be supportive of the Canadian dollar, which has been the best performing G10 currency this year, with a gain of about 2 per cent against the U.S. dollar. The central bank said this month that the currency has been relatively stable against the greenback.
FED THREADS A NEEDLE THAT’S ONLY GOING TO GET SMALLER
Bloomberg - Mohamed A. El-Erain (2021-03-17)
By raising its 2021 growth forecast to 6.5%, the Fed joined others in substantially improving its outlook for the U.S. economy. The forecast for the unemployment rate was reduced to 3.5%. Meanwhile, the Fed moved its favored measure of inflation — the PCE — up from 1.8% to 2.4%, for this year, with the core measures rising more moderately to 2.2%.
Despite these historically large revisions, the central bank’s policy statement remained virtually unchanged. The implied message — that the Fed will be even more ready to support an economy running ever hotter — was more than confirmed by Powell’s ultra-dovish comments at his press conference.OSFI UNWINDS REGULATORY ADJUSTMENTS FOR BANKS SUBJECT TO MARKET RISK CAPITAL ADEQUACY RULES
OSFI - Press Release (2021-03-16)
These measures included a reduction in the Stressed Value at Risk (“SVaR”) multiplier, a component of the market risk capital requirements that ensures that a minimum amount of capital is held against stress periods. At the beginning of the pandemic, the volatility in capital markets increased such that the level of additional conservatism achieved through the SVaR multiplier was temporarily not needed and banks were permitted to reduce the level of the multipliers used.
CBA TAPS BIG DATA AND MACHINE LEARNING TO SUPPORT CUSTOMERS HIT BY NATURAL DISASTERS
Finextra - Finextra (2021-03-15)
The new technology platform uses custom-built algorithms to monitor, in real-time, a mix of data points from official emergency sources and weather alert systems to offer one-to-one, personalised support for customers impacted by natural disasters.
BOC INCREASES AVAILABILITY OF SECURITIES AS GROWING BOND OWNERSHIP AFFECTS KEY MARKETS
G&M - Mark Rendell (2021-03-15)
The Bank of Canada has expanded the size of its daily bond sale and repurchase program, making more securities available to dealers in an attempt to counteract the impact that its large ownership of Government of Canada bonds is having on short-term funding markets.
CANADA SHOULD PRIORITIZE FISCAL SUPPORT OVER DEBT MANAGEMENT AS ECONOMY RECOVERS, OECD SAYS
G&M - Matt Lundy (2021-03-12)
Policy makers in Canada need to keep supportive measures in place as the economy recovers from the COVID-19 pandemic before turning to debt management, the Organization for Economic Co-operation and Development said Thursday.
OSFI SEEKS TO FINALIZE BASEL III REFORMS
Investment Executive - James Langton (2021-03-12)
OSFI launched a consultation on measures to implement the remaining features of the latest edition of the global capital adequacy regime, known as Basel III — which includes capital, liquidity, leverage and disclosure requirements — that was developed in response to the global financial crisis.
BANK OF CANADA’S HEIGHTENED FOCUS ON LABOUR SLACK MAY COOL THE HEELS OF THE BOND MARKET
G&M - DAVID PARKINSON (2021-03-11)
The Bank of Canada has set a high bar for the eventual raising of interest rates. But that doesn’t mean the central bank is equally reluctant about scaling back its quantitative easing program, even if it’s not yet willing to say so out loud. They’re two separate and distinct questions.
BANK OF CANADA KEEPS ITS FOOT ON THE GAS, BUT HINTS AT CHANGES TO COME
FP - Kevin Carmichael (2021-03-11)
The Bank of Canada acknowledged it had underestimated the economy’s ability to power through the second wave of COVID-19 infections, scrapping its January prediction that gross domestic product (GDP) would contract in the first quarter of 2021.
INVESTORS BRACING FOR BANK OF CANADA TO TAPER: DECISION GUIDE
Bloomberg - Shelly Hagan (2021-03-10)
Economists unanimously predict policy makers led by Governor Tiff Macklem will leave their key interest rate unchanged at 0.25% at a 10 a.m. decision Wednesday in Ottawa. There’s speculation, however, they could signal plans to pare back the central bank’s asset purchases at the next meeting in April.
BANK OF CANADA WANTS A HOUSING BUBBLE, WHILE OTHER CENTRAL BANKS TRY TO POP THEM
Better Dwelling - Stephen Punwasi (2021-03-10)
Central banks are flooding economies with cheap credit, and trying to prevent bubbles. Well, some countries are trying to prevent bubbles. Canada has decided home price inflation is an uncontrollable consequence of the environment. In fact, the country’s central bank welcomed the rapid home price growth as “needed.”
BANK OF CANADA WILL HOLD CURRENT LEVEL OF POLICY RATE UNTIL INFLATION OBJECTIVE IS SUSTAINABLY ACHIEVED, CONTINUES QUANTITATIVE EASING
BOC - Press Release (2021-03-10)
The Bank of Canada today held its target for the overnight rate at the effective lower bound of ¼ percent, with the Bank Rate at ½ percent and the deposit rate at ¼ percent. The Bank is maintaining its extraordinary forward guidance, reinforced and supplemented by its quantitative easing (QE) program, which continues at its current pace of at least $4 billion per week.
BOJ BOARD NOMINEE JUNKO NAKAGAWA IN HER OWN WORDS
Bloomberg - Yuko Takeo (2021-03-09)
Junko Nakagawa, a Nomura Holdings executive picked by Prime Minister Yoshihide Suga to join the Bank of Japan’s board, is seen as a policy moderate who’s likely to support the board’s current direction after her trailblazing rise in Japan’s male-dominated finance industry.
Nakagawa, now 55, was the first woman appointed to Nomura’s board, where she served as the group’s chief financial officer in the early 2010s, before becoming head of the asset management unit in 2019. If approved, she would replace Takako Masai, another former banker, as the only woman on the BOJ’s nine-member board.BANK OF CANADA INTEREST RATE ANNOUNCEMENT
BOC - BOC (2021-03-09)
On Wednesday, March 10, 2021, the Bank of Canada will announce its decision on the target for the overnight rate. A press release will provide a brief explanation of the decision.
AS ECONOMY HEATS UP, BANK OF CANADA WALKS A MESSAGING TIGHTROPE
G&M - Mark Rendell (2021-03-08)
The Bank of Canada will be walking a tightrope when communicating its rate decision this week, as rising bond yields and strong economic data have put its downbeat forecast at odds with brightening market expectations for a postpandemic recovery.
BOE GOVERNOR BAILEY SAYS RISKS TO U.K. ECONOMY REMAIN TILTED TO THE DOWNSIDE
Bloomberg - Lizzy Burden and Andrew Atkinson (2021-03-08)
Bank of England Governor Andrew Bailey said risks to the U.K. economy remain tilted to the downside, a remark that may rein in expectations that policy makers may soon shift toward containing inflation.
BRIGHTER FORECASTS BRING INFLATION, RATE HIKE WORRIES
Investment Executive - James Langton (2021-03-08)
“To us, it now appears likely that the U.S. output gap will be closed by the end of 2021 — an astonishing feat given just how ugly things were a year ago and highlighting once more how fundamentally different this latest recession has been from all those that have gone before it,” the report said.
MACHIN WAS PREPARING EXIT FROM CPPIB BEFORE UAE VACCINATION CONTROVERSY
G&M - ANDREW WILLIS AND TIM KILADZE (2021-03-05)
Mark Machin already had one foot out the door of Canada Pension Plan Investment Board when he was forced, under pressure, to resign as chief executive officer last week after receiving a COVID-19 vaccination in the United Arab Emirates.
BRITISH GOVERNMENT ANNOUNCES BIGGEST CORPORATE TAX HIKE IN DECADES IN BID TO HELP PANDEMIC-HIT ECONOMY
G&M - PAUL WALDIE (2021-03-04)
The British government has announced the country’s biggest corporate tax hike in almost 50 years in a bid to slowly fill the fiscal hole left by the pandemic.
ANT TUSSLES WITH BEIJING ON SHARING CUSTOMER DATA
Finextra - Finextra (2021-03-03)
The People's Bank of China wants access to Ant's consumer data to help state-owned banks assess credit worthiness.
CMHC TO GET NEW CEO AS EVAN SIDDALL STEPS DOWN NEXT MONTH
G&M - Rachelle Yungai (2021-03-03)
Evan Siddall, the outspoken housing agency chief who once told Canadians not to worship homeownership, is stepping down in April, ending his controversial and combative tenure.
BOC MUST CHANGE ITS TUNE AS ECONOMY OUTPERFORMS, REPORT SAYS
Better Dwelling - James Langton (2021-03-03)
Most sectors have almost reached pre-crisis levels, and the laggards that were hit hardest by the pandemic “are also the ones with potentially the most to gain should behaviour start to respond favourably to vaccinations over 2021 into 2022,” the report said.
EXTENDING WAGE, RENT SUBSIDIES TO JUNE 5 WILL COST $16-BILLION, CHRYSTIA FREELAND SAYS
G&M - Bill Curry (2021-03-03)
Federal subsidies for wages and rent will be extended at current levels until June 5, a move Finance Minister Chrystia Freeland said will cost about $16-billion.
CANADA GDP COLLAPSE REVEALS HOW TRUDEAU’S DEBT BINGE WENT AWRY
Bloomberg - Theophilos Argitis (2021-03-02)
Justin Trudeau was more committed to borrowing his way out of the Covid-19 crisis last year than almost any other leader in the developed world. That cushioned the blow of the pandemic, but raises some hard questions about what Canada got for all that spending.
SEC SUSPENDS TRADING IN MULTIPLE ISSUERS BASED ON SOCIAL MEDIA AND TRADING ACTIVITY
SEC - Press Release (2021-03-01)
Today's order states that trading is being suspended because of questions about recent increased activity and volatility in the trading of these issuers, as well as the influence of certain social media accounts on that trading activity. The order also states that none of the issuers has filed any information with the SEC or OTC Markets, where the companies' securities are quoted, for over a year. As a result, the SEC suspended trading in the securities of: Bebida Beverage Co. (BBDA); Blue Sphere Corporation (BLSP); Ehouse Global Inc. (EHOS); Eventure Interactive Inc. (EVTI); Eyes on the Go Inc. (AXCG); Green Energy Enterprises Inc. (GYOG); Helix Wind Corp. (HLXW); International Power Group Ltd. (IPWG); Marani Brands Inc. (MRIB); MediaTechnics Corp. (MEDT); Net Talk.com Inc. (NTLK); Patten Energy Solutions Group Inc. (PTTN); PTA Holdings Inc. (PTAH); Universal Apparel & Textile Company (DKGR); and Wisdom Homes of America Inc. (WOFA).
WHY IS MACKLEM INDIFFERENT TO STATSCAN’S INFLATION SHIFT?
G&M - DAVID PARKINSON (2021-02-25)
Statistics Canada took a pratfall this week on some key inflation calculations, and it couldn’t have come at a much more inopportune time. So why doesn’t Bank of Canada Governor Tiff Macklem – whose central responsibility is all about inflation – sound more bothered?
BOE GOVERNOR WARNS EU OVER DERIVATIVES CLEARING POWER GRAB
FT - Philip Stafford and Delphine Strauss in London and Sam Fleming (2021-02-25)
Its stance has increasingly drawn criticism from the UK’s central bank governor, who on Wednesday focused on the tussle over clearing houses, which sit between deals and prevent defaults from creating a chain reaction across markets.
BANK OF CANADA GOVERNOR INDICATES READINESS TO LET ECONOMY RUN HOT TO INCLUDE MORE PEOPLE IN RECOVERY
FP - Kevin Carmichael (2021-02-24)
Macklem, who took over as Bank of Canada governor in June, is making inequality the focus of policy, as Powell in the United States and Christine Lagarde at the European Central Bank have also done. On Feb. 23, Macklem made it clear that he intends to let the economy run hotter for longer than most mainstream economists would have thought safe only a few years ago, reinforcing both the likelihood that interest rates will remain extremely low for at least another couple of years and that more people will potentially get to participate in the recovery.
INFRASTRUCTURE BANK INVESTMENT STRATEGY
CIB-BIC - CIB-BIC (2021-02-24)
2021 statement of priorities and accountabilities.
FED’S JEROME POWELL SET TABLE FOR BIDEN ECONOMY, BUT WILL HE STAY FOR DESSERT?
G&M - Howard Schneider (2021-02-23)
Over the past year Federal Reserve Chair Jerome Powell has engineered the largest economic rescue in U.S. history, thrown a controversial lifeline to companies hard hit by the coronavirus pandemic and steered a sweeping labour-friendly revamp of monetary policy that any presidential administration would welcome.
BOE'S VLIEGHE DOUBTS HE WILL EVER SEE RATES BACK AT 5%
Reuters - David Milliken (2021-02-22)
Asked by students at Durham University when interest rates might return to the level of 4% to 5% common before the financial crisis, Vlieghe replied: “Maybe not in my lifetime.”
MARIO DRAGHI SWORN IN AS ITALY’S NEW PRIME MINISTER
FT - Miles Johnson (2021-02-22)
Draghi, one of Europe’s most highly regarded public officials, was unexpectedly called in by Mattarella earlier this month after the previous coalition collapsed in the middle of the latest pandemic wave.
STATSCAN REVISES CORE INFLATION UPWARD, BACKTRACKS ON NEW METHODS
G&M - Mark Rendell (2021-02-22)
The sudden revision surprised economists, causing some to question whether Statscan had an accurate picture of inflation. The change was made amid growing concern about higher-than-expected inflation, which is driving bond yields up and sending jitters through the market.
RESIDENTIAL MORTGAGE UNDERWRITING PRACTICES AND PROCEDURES GUIDELINE (B-20)
OSFI - OSFI (2021-02-18)
When Guideline B-20 revisions were introduced, lenders made changes that reduced the proportion of mortgages approved for the most highly indebted or over-leveraged borrowers (e.g. mortgage loans that exceed 450% of a borrower’s income.)
JAPAN AGREES $668 MILLION LOAN TO AFRICAN DEVELOPMENT BANK FUND
Reuters - Staff (2021-02-17)
The contribution from government development bank the Japan International Cooperation Agency will support efforts to improve African countries’ economic resilience at a time when many are struggling with the coronavirus pandemic, the AfDB said in a statement.
ROBINHOOD HEADS TO THE HILL: WHAT TO WATCH AT THE CONGRESSIONAL HEARING
FT - Philip Stafford (2021-02-17)
Hedge fund managers, professional investors and specialists in the more arcane corners of trade processing are clearing their diaries and checking popcorn supplies for a session that could determine how regulators deal with an explosion in trading by amateurs for years to come.
YELLEN NEEDS TO TELL ASIAN NATIONS TO STOP CURRENCY MANIPULATION
FT - David Waddill (2021-02-17)
In a time of global crisis, the persistent excess savings of the Asian nations need to be drawn down to help stimulate global growth — otherwise why were they accumulating these reserves other than for “beggar thy neighbour” purposes?
YELLEN SHIFT ON VAST TREASURY CASH PILE POSES PROBLEM FOR POWELL
Bloomberg - Rich Miller and Liz McCormick (2021-02-16)
Treasury Secretary Janet Yellen is giving Federal Reserve Chairman Jerome Powell a bit of a headache when it comes to managing the money markets.
US FINANCIAL SERVICES COMMITTEE NAMES WITNESSES FOR GAMESTOP HEARING
Securities Finance - Alex Pugh (2021-02-15)
Speakers include Robinhood CEO Vladâ¯Tenev, hedge fund Citadel CEO Kenneth Griffin,â¯Reddit CEO and co-founder Steve Huffman, Melvin Capital CEO Gabrielâ¯Plotkin, and day trader Keith Gill, who is credited with rallying the retail interest in GameStop through Reddit forum WallStreetBets.
CRYPTOCURRENCY BOOM IS 'SPECULATIVE MANIA,' BANK OF CANADA DEPUTY SAYS
FP - Shelly Hagan (2021-02-11)
A top Bank of Canada official called the recent spike in cryptocurrency prices “speculative mania,” and said such assets don’t have the qualities to become the money of the future.
BIDEN ADMINISTRATION WEIGHS FORGIVING STUDENT DEBT BY EXECUTIVE ACTION
WSJ - Josh Mitchell and Eliza Collins (2021-02-05)
The Biden administration is considering using executive action to forgive Americans’ federal student debt, the White House’s chief spokeswoman said Thursday, responding to pressure from Democratic lawmakers and progressive groups.
INFRASTRUCTURE BANK DIRECTED TO INVEST $1-BILLION IN INDIGENOUS PROJECTS
G&M - KRISTY KIRKUP AND BILL CURRY (2021-02-04)
The federal government has directed the Canada Infrastructure Bank to invest at least $1-billion in revenue-generating projects that benefit Indigenous peoples as part of a new statement of priorities for the Crown corporation.
BOC DEPUTY GOVERNOR LAWRENCE SCHEMBRI SEES LITTLE CHANGE TO INFLATION TARGETING FRAMEWORK
G&M - Mark Rendell (2021-02-04)
Bank of Canada deputy governor Lawrence Schembri is expecting little change to the central bank’s current inflation targeting regime, even as it examines alternative monetary policy targets, including a potential “dual mandate” that would put a more explicit focus on employment.
OTTAWA LAUNCHES NEW LOAN PROGRAM OF UP TO $1M FOR FIRMS WALLOPED BY COVID-19 SOCIAL SHARING
CBC - CBC (2021-02-04)
Businesses can qualify for between $25,000 and $1 million if they meet the eligibility requirements, the main one being that they must show their revenues have fallen by at least 50 per cent for at least three months out of the previous eight.
SIX BILLION DOLLARS AND COUNTING: MAJOR TAX BATTLE BETWEEN THE CRA AND CANADA'S BIG BANKS SHOWS NO SIGNS OF ABATING
FP - Geoff Zochodne (2021-02-02)
A major tax battle between the Canada Revenue Agency and the country’s six biggest banks has more than doubled in size over the past few years, with the lenders saying they are being reassessed for in excess of $6 billion due to a disagreement over dividends.
BITCOIN MAY 'BREAK DOWN ALTOGETHER' - BIS CHIEF
Finextra - Finextra (2021-01-29)
Bitcoin is "more of a speculative asset than money" that should perhaps "be seen more like a community of online gamers, who exchange real money for items that only exist in cyber space," says Carstens in a speech on digital currencies to the Hoover Institute.
CENTRAL BANKERS SHOW INTEREST IN DIGITAL CURRENCIES
G&M - Mark Rendell (2021-01-28)
Central bankers around the world are ramping up research into digital currencies, according to the Bank of International Settlements, even as cryptocurrencies such as bitcoin are likely to remain niche products with little use as payment methods.
HARD-HIT BUSINESSES GET DETAILS ON LIBERALS’ NEW LOAN FUND
Investment Executive - CP (2021-01-28)
The federally backed loan can be used for rent, utilities and help with payroll, among other costs, to keep operations running through public health restrictions, but can’t be used to pay or refinance existing loans.
UK GOVERNMENT PLANS POST-BREXIT REFORM OF INVESTMENT INDUSTRY
FT - Chris Flood and Emma Agyemang (2021-01-27)
The government has outlined far reaching proposals to strengthen the international competitiveness of the UK’s £9.9tn asset management industry with tax reforms and innovative fund structures, providing a road map for the sector’s future outside of the EU.
AUSTRALIA'S SECURITIES REGULATOR SAYS SERVER HIT BY CYBER SECURITY BREACH
Reuters - Staff (2021-01-25)
Australia’s securities regulator said on Monday there was a cyber security breach at a server it used to transfer files including credit licence applications where some information may have been viewed.
TASK FORCE RECOMMENDS SWEEPING CHANGES TO OSC
Investment Executive - James Langton (2021-01-25)
Among other things, the task force called for a restructuring of the Ontario Securities Commission (OSC), including spinning out its adjudicative function, separating the chair and CEO roles, expanding its mandate to include promoting growth and even changing its name — to the Ontario Capital Markets Authority.
BIS INNOVATION HUB TARGETS CBDCS AND GREEN FINANCE IN 2021
Finextra - Finextra (2021-01-25)
Set up in 2019 the BIS Innovation Hub has centres in Switzerland, Hong Kong and Singapore, with locations in Toronto, London, Frankfurt and Paris, and Stockholm on the horizon.
EUROPEAN CENTRAL BANK SETS UP CLIMATE CHANGE CENTRE
Finextra - Finextra (2021-01-25)
The centre will shape and steer the ECB’s climate agenda internally and externally, building on the expertise of all teams already working on climate-related topics. Its activities will be organised in workstreams, ranging from monetary policy to prudential functions, and supported by staff that have data and climate change expertise.
PETER BETHLENFALVY, ONTARIO’S NEW FINANCE MINISTER, CAME INTO POLITICS TO SLASH DEFICITS. THEN, A PANDEMIC HAPPENED
G&M - James Bradshaw (2021-01-21)
For an avowed fiscal hawk like Peter Bethlenfalvy, it’s hard being thrust onto centre stage in the midst of a global pandemic.
CMHC SAYS W-SHAPED RECOVERY WOULD BE ‘VERY SEVERE’ WITHOUT GOVERNMENT ASSISTANCE
G&M - Tara Deschamps (2021-01-21)
A W-shaped recovery from the COVID-19 pandemic could trigger a nearly 50 per cent drop in housing prices and a peak unemployment rate of 25 per cent, if the government doesn’t offer relief, says the Canadian Mortgage and Housing Corporation.
WHY THE BANK OF CANADA COULD BE AMONG THE FIRST TO RAISE INTEREST RATES
FP - Kevin Carmichael (2021-01-20)
To be sure, these are future considerations. There won’t be any talk of higher interest rates when the Bank of Canada’s leaders conclude their latest round of policy deliberations on Jan. 20. The most pressing concerns for the central bank at this stage are whether a grim winter will cripple the recovery, and when to slow its multi-billion-dollar bond-purchase program, which could create asset-price bubbles if left in place too long.
BANK OF ENGLAND ADAPTS BANK STRESS TEST FOR PANDEMIC ERA
Reuters - Huw Jones (2021-01-20)
The Bank of England said on Wednesday the aim of its banking stress test this year is to check if banks can continue helping the economy during the pandemic and if a return to more normal levels of dividends is possible.
YELLEN MAKES CASE FOR SWEEPING STIMULUS PACKAGE IN FACE OF GOP SKEPTICISM
WSJ - Kate Davidson (2021-01-20)
Janet Yellen made the case for another sweeping economic aid package at her hearing to be the next U.S. Treasury secretary Tuesday, pushing back against Republican skepticism of the need for more deficit spending to bolster the recovery.
FOREIGN INVESTORS SNAP UP FEDERAL DEBT, BANK STOCKS
WSJ - James Langton (2021-01-19)
Foreign investors added $11.8 billion worth of Canadian securities during the month, “largely purchases of federal government debt,” the agency said Monday. Canadian investors acquired $7.6 billion of foreign securities, led by U.S. equities.
FINANCE MINISTER WARNED ABOUT INDEBTED CANADIANS' INCREASING VULNERABILITY TO HIGHER RATES BEFORE THE PANDEMIC
FP - Geoff Zochodne (2021-01-18)
The concerns were laid out in a memorandum addressed to then-finance minister Bill Morneau from his deputy in early 2020. The document, which was recently obtained by the Post via access-to-information request, explored the drivers of rising numbers of consumer insolvencies.
MARKET EYES BOC AHEAD OF POSSIBLE POLICY RATE MICROCUT
G&M - Mark Rendell (2021-01-18)
Few economists and market analysts expect the central bank to trim its overnight target rate on Wednesday. But they say the possibility can’t be ruled out as the bank tries to balance the near-term pain of lock-downs against better-than-expected vaccine news and robust fiscal stimulus.
POWELL SIGNALS FED WILL KEEP AIDING ECONOMY WITH BOND BUYING
Investment Executive - Christopher Rugaber (2021-01-15)
During an online discussion hosted by Princeton University, from which Powell earned his undergraduate degree, the Fed chair said the recovery of the economy from the pandemic recession “is far from our goals.” The Fed had said after its last policy meeting last month that it would continue to buy $120 billion in bonds each month until the economy made “substantial further progress” toward the Fed’s goals of maximum employment and stable 2% inflation.
BIDEN TO PUSH $1.9TN STIMULUS FOR PANDEMIC-BATTERED US ECONOMY
FT - James Politi (2021-01-15)
Joe Biden pleaded for Congress to “act now” on a new $1.9tn economic rescue plan, setting it up as his top legislative priority as he prepares to enter the White House next week.
FEDERAL DEBT IS MANAGEABLE WITH GDP GROWTH, POLOZ SAYS
G&M - Mark Rendell (2021-01-14)
Boosting Canada’s long-term economic growth by reducing interprovincial trade barriers and introducing programs such as universal daycare may be the best way to manage ballooning federal and provincial government debt, former Bank of Canada governor Stephen Poloz says.
U.S. DEFICIT IS 61% GREATER THAN SAME PERIOD A YEAR AGO
Investment Executive - Martin Crutsinger (2021-01-14)
The U.S. government’s deficit in the first three months of the budget year was a record-breaking $572.9 billion, 60.7% higher than the same period a year ago, as spending to deal with the Covid-19 pandemic pushed outlays up while revenue declined. (All figures are in U.S. dollars.)
CHINESE REGULATORS TO PUSH TECH GIANTS TO SHARE CONSUMER CREDIT DATA - SOURCES
Reuters - Julie Zhu (2021-01-11)
China plans to push tech giants including Ant Group, Tencent and JD.com to share consumer loan data to prevent excess borrowing and fraud, two people with knowledge of the matter said, in Beijing’s latest tightening of scrutiny.
TRUMP ORDERS BAN ON CHINESE APPS' TRANSACTIONS
Reuters - Reuters (2021-01-06)
U.S. President Donald Trump on Tuesday (January 5) signed an executive order banning transactions with eight Chinese software applications, including WeChat Pay and Alipay. Gloria Tso reports.
A $13 TRILLION CRISIS-ERA DEBT BILL COMES DUE FOR BIG ECONOMIES
Bloomberg - ANchalee Warrachate (2021-01-05)
The world’s biggest economies shouldering record debt burdens are about to confront an unwelcome legacy of the financial crisis: a $13 trillion debt bill.
CENTRAL BANKS’ DEBT MONSTERS WILL NEED TAMING
Reuters - Neil Unmack, Anna Szymanski (2021-01-04)
Central bankers will spend 2021 trying to tame the debt monsters they made in 2020. The pandemic-induced market meltdown forced Federal Reserve Chair Jay Powell to buy corporate debt for the first time, while European Central Bank President Christine Lagarde unveiled plans to spend an unprecedented 1.85 trillion euros propping up markets. Yet in helping resolve the crisis, rate-setters sowed the seeds of the next one.
ONTARIO FINANCE MINISTER RESIGNS OVER CARIBBEAN VACATION OUTRAGE
Bloomberg - Shelly Hagan (2021-01-04)
Ontario Finance Minister Rod Phillips stepped down from the position amid public outrage that he was vacationing in the Caribbean over the holidays, despite travel restrictions.
EUROPEAN SHARES MARK BEST CLOSE IN 10 MONTHS AFTER POST-BREXIT AGREEMENT
CBC - Reuters (2020-12-29)
Britain and the European Union signed a Brexit trade deal late on Thursday, preserving several trade provisions for both sides and limiting the scale of disruption resulting from the divorce.
BRITAIN, CANADA STRIKE SHORT-TERM DEAL TO AVOID POST-BREXIT TARIFFS
G&M - CP (2020-12-23)
“With this announcement, our government will ensure Canadian businesses that trade goods with the United Kingdom continue to have preferential access,” Freeland said in a statement.
VIRUS RELIEF PACKAGE OF CHEQUES, TAX BREAKS AND BUSINESS AID, THE SECOND BIGGEST RESCUE IN U.S. HISTORY, PASSES CONGRESS
FP - Erik Wasson, Laura Litvan and Billy House (2020-12-23)
The Senate followed the House late Monday in passing by overwhelming margins the US$2.3 trillion bill, just hours after lawmakers got their first look at the 5,593 pages of text. The White House has said President Donald Trump will sign it.
WHY BOC'S TIFF MACKLEM KEEPS A PICTURE OF G7 LEADERS AT THE HEIGHT OF THE 2008 CRISIS
FP - Kevin Carmichael (2020-12-21)
“I still have a picture, I’ll go get it afterwards,” said Macklem, who was the Finance Department’s top international official at the time. “I keep this picture of the beginning of the meeting. I’m in the picture and I look terrible. I was pretty stressed. I keep that in my office as a little reminder of that feeling in the pit of your stomach.”
CANADA WILL HURT ITSELF IF IT PULLS OUT OF ASIAN INFRASTRUCTURE BANK, PRESIDENT SAYS
G&M - Nathan Vanderklippe (2020-12-21)
The Asian Infrastructure Investment Bank plays a useful role in burnishing China’s image, its president acknowledges, even as he warns that Canada would hurt itself by leaving an international institution that critics have called a tool of Beijing.
BANK OF CANADA GOVERNOR WANTS TO AVOID HOUSING POLICY MISTAKES OF THE PAST
FP - Kevin Carmichael (2020-12-21)
“We do have very low interest rates, and we have given extraordinary forward guidance,” Tiff Macklem, the current Bank of Canada governor, said in an exclusive year-end interview on Dec. 16. “That’s partly how monetary policy works. It stimulates, lowers the cost of credit, so you’re probably going to see more spending on things that people use credit for. Housing would be high on that list.”
SOME PLAIN TALK ABOUT THE DOLLAR FROM BANK OF CANADA GOVERNOR TIFF MACKLEM
FP - Kevin Carmichael (2020-12-21)
In the end, the dollar played only a minor role in the Poloz story. He devoted a speech to the subject in 2014, but the currency rarely featured in interest-rate discussions. In his final interview as governor last May, Poloz said he thought that he had been unfairly tagged as being “soft on the dollar,” when all he was doing was trying to keep deflationary forces at bay.
YELLEN PRESSED TO BACK STRONG DOLLAR IN REVERSING TRUMP-ERA TONE
Bloomberg - Saleha Mohsin and Liz McCormick (2020-12-21)
The greenback’s tumble this year -- it’s heading for the second-biggest drop in the past decade and a half -- has already stoked foreign policy makers’ concerns, thanks to the competitive advantage it gives the U.S. Even a tacit endorsement of a weakening dollar could spur tensions with trading partners.
DON’T WORRY ABOUT CANADA BOND TAPER TANTRUM, CIBC SAYS
Bloomberg - Shelly Hagan (2020-12-18)
The Bank of Canada may be forced to wind down its bond purchases next year because its holdings are getting too large, but don’t expect the move to drive up domestic borrowing costs.
WHAT COULD FOLLOW END OF BOC’S STIMULUS MEASURES
Investment Executive - IE (2020-12-18)
A QE taper likely won’t lead to “severe” tightening of financial conditions, particularly if other larger central banks maintain their bond-purchasing volumes, the
CANADA’S HEAD BANKING REGULATOR TO STEP DOWN IN JUNE
G&M - James Bradshaw (2020-12-18)
The head of Canada’s banking regulator, Jeremy Rudin, will not seek a second term and will step down from his post next June.
BREXIT TRADE TALKS ‘IN A SERIOUS SITUATION’ AND NO DEAL VERY LIKELY, UK SAYS
G&M - GUY FAULCONBRIDGE AND KATE HOLTON (2020-12-18)
British Prime Minister Boris Johnson’s office said on Thursday that trade talks with the European Union were in a “serious situation” and that no agreement would be reached unless the bloc changed its position substantially.
2020 RISK MANAGEMENT WEBCAST FOR DEPOSIT-TAKING INSTITUTION
Youtube - Jeremy Rudin (2020-12-18)
OSFI hosted the 2020 Risk Management Webcast for Deposit-Taking Institution on November 23, 2020. Please click the timestamps below to jump to specific topics in the video:
FEDERAL RESERVE VOWS TO CONTINUE BOND PURCHASES UNTIL RECOVERY SEES ‘SUBSTANTIAL PROGRESS’
G&M - HOWARD SCHNEIDER, ANN SAPHIR AND JONNELLE MARTE (2020-12-17)
“The parts of the economy that are weak are the service-sector businesses that involve close contact,” such as restaurants and the travel industry, Powell said in a news conference following the two-day policy meeting.
SECOND WAVE COULD SEND ECONOMIC GROWTH INTO NEGATIVE TERRITORY IN FIRST QUARTER, BANK OF CANADA’S MACKLEM WARNS
G&M - DAVID PARKINSON (2020-12-16)
“Near term, rising COVID-19 infections will dampen growth and could even deepen our economic hole,” Mr. Macklem said in a speech via video-conference Tuesday to the Greater Vancouver Board of Trade.
THE BANK OF CANADA INSISTS IT IS NOT FUNDING THE GOVERNMENT. REALLY?
G&M - KONRAD YAKABUSKI (2020-12-16)
Some experts believe the Bank of Canada and its counterparts in the United States and Europe have embarked on a course of debt monetization as their economies lurch from crisis to crisis. And they worry that domestic politics will make it very hard to reverse course.
WALL OF MONEY HEADED FOR INFRASTRUCTURE PROJECTS
FP - Barbara Shecter (2020-12-16)
“I really encourage governments around the world that have got massive deficits to really consider at this point privatizing, you know, selling operating brownfield infrastructure assets, if they can, because they’re going to get extraordinary prices for it, given the wall of money that’s interested in it, and it will help (bring down) deficits.”
FEDERAL RESERVE 'BONEHEADS' EMERGE FROM TRUMP ERA UNSCATHED
Reuters - Howard Schneider (2020-12-16)
In the end, the guard-rails mostly held. The Fed on Wednesday concludes the last Federal Open Market Committee meeting with Trump in the White House. The bank has avoided the sort of reputational damage suffered by many federal agencies, like the Centers for Disease Control or the Environmental Protection Agency, where politics seemed to gain a foothold over technical expertise and original mission.
FED MULLS SHIFT IN BOND BUYING PROGRAM: FOMC DECISION-DAY GUIDE
Bloomberg - Steve Matthews (2020-12-16)
Economists say the Fed may deliver fresh guidance on its asset purchases, now $120 billion a month, tying how long the buying will continue to substantial progress in meeting its goals of full employment and 2% inflation. That would be a stronger commitment than the existing pledge to maintain purchases “over coming months.”
WILL THE FED ADJUST ITS ASSET PURCHASE PROGRAMME?
FT - FT (2020-12-14)
When members of the Federal Open Market Committee convene for their final meeting of the year on Tuesday and Wednesday, the fate of the US central bank’s asset purchase programme will be in focus.
EU REACHES COMPROMISE WITH HUNGARY AND POLAND, UNBLOCKING €1.8-TRILLION PANDEMIC RECOVERY FUND
G&M - JAN STRUPCZEWSKI AND KATE ABNETT (2020-12-11)
European Union leaders unblocked on Thursday a 1.8 trillion euro financial package to help the economy recover from the pandemic-induced recession after reaching a compromise with Poland and Hungary, the chairman of EU leaders Charles Michel said.
BANK OF ENGLAND READIES ARMOURY TO DEAL WITH ANY BREXIT DISRUPTION
Reuters - David Milliken, Huw Jones (2020-12-11)
The Bank of England took steps on Friday to keep banks lending through 2021 as Britain grapples with the COVID-19 pandemic and braces for any market disruption from a big change in the UK’s trading relationship with the European Union.
BOND-BUYING PROGRAM FACES MISCONCEPTIONS, BOC SAYS
Investment Executive - ANITA BALAKRISHNAN (2020-12-11)
The central bank has purchased a little more than $180 billion in Government of Canada bonds since March as part of its quantitative easing, or QE, program. Over the same period, the federal government has rolled out a slew of spending programs to support businesses and consumers amid job losses tied to the Covid-19 pandemic.
THE DOLLAR HAS HAD A 100-YEAR RUN AS THE WORLD'S RESERVE CURRENCY. BUT A NEW CLASS OF CONTENDERS IS EMERGING
FP - Ruchir Sharma (2020-12-10)
Before the U.S., only five powers had enjoyed the coveted “reserve currency” status, going back to the mid-1400s: Portugal, then Spain, the Netherlands, France and Britain. Those reigns lasted 94 years on average. At the start of 2020, the dollar’s run had endured 100 years. That would have been reason to question how much longer it could continue, but for one caveat: the lack of a successor.
HIGH LOONIE ON THE RADAR AS BANK OF CANADA SEES 'CHOPPY' RECOVERY FROM PANDEMIC
FP - Kevin Carmichael (2020-12-10)
Governor Tiff Macklem and his deputies on the Governing Council made explicit mention of the exchange rate for the second consecutive time while updating their interest-rate stance, a signal that the dollar’s recent strength could reduce what Canada might otherwise expect to earn from exports.
BANK OF CANADA WILL MAINTAIN CURRENT LEVEL OF POLICY RATE UNTIL INFLATION OBJECTIVE IS ACHIEVED, CONTINUES ITS QUANTITATIVE EASING PROGRAM
BOC - Media Relations (2020-12-10)
The Bank of Canada today maintained its target for the overnight rate at the effective lower bound of ¼ percent, with the Bank Rate at ½ percent and the deposit rate at ¼ percent. The Bank is maintaining its extraordinary forward guidance, reinforced and supplemented by its quantitative easing (QE) program, which continues at its current pace of at least $4 billion per week.
BANK OF CANADA OPENS DOOR TO ANOTHER RATE CUT — BUT NOT ONE BELOW ZERO
FP - Kevin Carmichael (2020-12-10)
The Bank of Canada has now officially said it could potentially drop the benchmark interest rate below its current setting of 0.25 per cent, while emphasizing that it remains deeply skeptical of negative interest rates.
THE U.S. IS FINALLY DOING SOMETHING ABOUT THE GLOBAL MONEY LAUNDERING SCOURGE. WILL WE?
FP - Diane Francis (2020-12-10)
The bill is part of the National Defense Authorization Act, the annual omnibus defence bill that passed in the House of Representatives by a veto-proof margin, which means that neither the sitting nor future president can overrule it. The Senate is expected to follow.
‘QE DOES NOT RELEASE THE GOVERNMENT FROM ITS LIABILITIES’: BOC DEPUTY GOVERNOR
G&M - DAVID PARKINSON (2020-12-10)
Bank of Canada deputy governor Paul Beaudry used a key speech Thursday to defend the central bank’s quantitative easing program, seeking to dispel the notion that it is printing money to finance the federal government’s huge deficit.
CANADA’S CREDIT RATING COULD TAKE ANOTHER HIT IF OTTAWA STICKS TO SPENDING PLANS, FITCH WARNS
FP - Reuters (2020-12-09)
“Canada’s recently released medium-term financial roadmap reinforces the likelihood of a rising public debt burden and expansionary fiscal policy without precise details of a return to a fiscal anchor and consolidation,” Fitch Ratings said in an article posted on its website on Monday.
BANK OF CANADA TO RESTATE LOW-RATE GUIDANCE: DECISION-DAY GUIDE
Bloomberg - Shelly Hagan (2020-12-09)
Economists predict the central bank will restate a pledge to hold its overnight interest rate at 0.25% until at least 2023, while continuing bond purchases at the current pace of C$4 billion ($3.1 billion) per week. The bank releases its December policy decision at 10 a.m. in Ottawa.
CHINA’S YUAN RAPIDLY FALLS AT CLOSE AFTER HITTING STRONGEST LEVEL IN 2 YEARS
Bloomberg - Bloomberg (2020-12-09)
China’s yuan weakened minutes before Wednesday’s official close, reversing an earlier gain that had pushed the currency to its strongest level in more than two years.
TRUDEAU’S FINANCE SHAKE-UP SIGNALS FULL STEAM AHEAD ON SPENDING
Bloomberg - Theophilos Argitis and Kait Bolongaro (2020-12-08)
Michael Sabia, a big-name corporate leader who has run the nation’s largest phone company and second-largest pension fund, was appointed deputy minister of finance Monday. The move formalizes the role he’s played since the early days of the pandemic as a top adviser to both Trudeau and his finance minister, Chrystia Freeland.
It also illustrates the extent to which an ambitious fiscal agenda has prevailed in Trudeau’s administration. Sabia has called for spending taps to remain open and isn’t too worried about higher debt. His ambitions are to reshape the economy after the pandemic, in line with the prime minister’s plan to put the state at the center of any recovery. “If I had a choice between dealing with the deficit of weak infrastructure, or the deficit of a digital divide, or the deficit of significant social inequality, those are all deficits that matter and I think addressing those right now is at least as important as managing our fiscal situation,” Sabia said in a September interview with TVOntario.EUROZONE CHIEF SEIZES ON VIRUS AND BREXIT TO REVIVE BANKING UNION
FT - Sam Fleming and Mehreen Khan (2020-12-08)
Brexit and the coronavirus pandemic have reinforced the need to solidify the single currency’s foundations, said the president of the Eurogroup of finance ministers, who will seek to revive the bloc’s long-stalled banking union project this week.
OSFI KEEPS BIG BANKS’ CAPITAL BUFFER STEADY, SAYS FINANCIAL SYSTEM STILL FACES UNCERTAINTY FROM PANDEMIC
G&M - James Bradshaw (2020-12-08)
Canada’s banking regulator has chosen to leave a key threshold for large banks’ capital reserves unchanged, even as it warned that the country’s financial system still has vulnerabilities and faces uncertainty amid the coronavirus pandemic.
OSFI RELEASES NEW (AND SOFTER) PROPOSED RULE ON HIGH-LIMIT POLICIES
Canadian Underwriter - David Gambrill (2020-12-07)
Canada’s solvency regulator has come out with a softer version of its proposed rule regarding the property and casualty insurance industry’s issuance of high-limit policies.
DOMESTIC STABILITY BUFFER
OSFI - OSFI (2020-12-07)
Decisions on the calibration of the buffer are based on OSFI supervisory judgement, informed by its monitoring and analytical work on a range of vulnerabilities, and are made in consultation with OSFI's federal financial regulatory partners.
WE’LL PAY FOR ALL THESE DOWN PAYMENTS
FP - Jack M. Mintz (2020-12-04)
The fiscal update does not say by how much each dollar of government spending increases GDP but during the pandemic it must be low. Household incomes rose by 13 per cent during the downturn, more than in any other OECD country (even the U.S. during its election year). But despite all this new money, households did not spend more. Instead, our household saving rate jumped by 23 per cent of personal disposable income, more than in any other country. The update spins this embarrassing fact by saying Canadians were getting a “down payment” now to spend later.
U.S. BANK LOBBY SPENDS $1 MILLION ON AD BLITZ FOR REPUBLICAN PERDUE IN GEORGIA U.S. SENATE RUNOFF
Reuters - Pete Schroeder (2020-12-04)
The largest U.S. bank lobby group is spending $1 million on television ads to boost Republican Senator David Perdue, in a bid to ensure the Senate remains in Republican hands after Georgia runoffs in January, according to federal filings.
MORE THAN 400 LAWMAKERS FROM 34 COUNTRIES BACK 'MAKE AMAZON PAY' CAMPAIGN
Reuters - Paul Sandle (2020-12-04)
More than 400 lawmakers from 34 countries have signed a letter to Amazon.com Inc boss Jeff Bezos backing a campaign that claims the tech giant has “dodged and dismissed … debts to workers, societies, and the planet,” organisers said.
CHRYSTIA FREELAND VETTING AT LEAST FIVE CANDIDATES FOR NEW FINANCE CANADA DEPUTY
G&M - Andrew Willis (2020-12-03)
Finance Minister Chrystia Freeland is looking outside her own department for the new second-in-command who will help steer Canada’s economy through the pandemic and the $100-billion stimulus spending campaign that will follow.
BOJ'S SUZUKI SAYS CENTRAL BANK SHOULD ALLOW YIELD CURVE TO STEEPEN MORE
Reuters - Leika Kihara (2020-12-03)
Under its yield curve control policy, the BOJ seeks to keep short-term interest rates at around -0.1% and 10-year bond yields around zero as part of efforts to revive the economy with low borrowing costs.
OTTAWA GIVES HOUSEHOLDS $7 FOR EVERY DOLLAR OF INCOME LOST IN PRIVATE SECTOR
G&M - Patrick Brethour (2020-12-02)
Statistics Canada data show that primary household income, or private-sector earnings, barely dropped between the first quarter of 2020 and third quarter, falling by just 1 per cent, or $15.2-billion to $1.52-trillion. But transfers from government, which include existing programs such as employment insurance plus new coronavirus-era programs, made up for that drop many times over. Those transfers rose by $103.8-billion from the first quarter to the third quarter, meaning that the government effectively gave households nearly $7 for each dollar of lost private-sector income. Those figures are seasonally adjusted and stated on an annualized basis.
THE CPP PREMIUM HIKE FOR 2021 LOOKS BAD, BUT IT WILL DO A LOT OF GOOD
G&M - Rob Carrick (2020-12-02)
In a year of plenty, we’d shrug off the coming increase in the amount of our paycheques that goes toward Canada Pension Plan premiums.
MERCHANTS CALL FOR LEVEL PLAYING FIELD AS LOCKDOWN RULES PICK WINNERS AND LOSERS IN RETAIL
FP - Barbara Shecter (2020-11-30)
In Manitoba, for example, businesses are permitted to sell only essential items such as food and pharmaceuticals regardless of the full inventory they carry, she said. Meanwhile, Ontario’s restrictions for the hot zones Toronto and nearby Peel permit big-box businesses to be fully open as long as they also sell some items deemed essential.
BANK OF CANADA CHIEF DEFENDS BOND PURCHASES FROM POLITICAL ATTACKS
Bloomberg - Shelly Hagan (2020-11-30)
Governor Tiff Macklem brushed off accusations the Bank of Canada is financing Justin Trudeau’s deficits and fueling inflation risks, even as he acknowledged there are limits to how much government debt it can buy.
CRA ASSESSES NEARLY $60 MILLION UNDER OFFSHORE TAX INFORMANT PROGRAM
Investment Executive - Rudy Mezzetta (2020-11-30)
Under OTIP, a whistleblower program launched in 2014, the CRA provides financial rewards to individuals who come forward with information related to major international tax evasion and aggressive tax avoidance that lead to the collection of taxes owing.
FEDS MAY BOLSTER SUPPORTS TO BUSINESS, HOUSEHOLDS: RBC
Investment Executive - James Langton (2020-11-30)
“We already see some stimulus bleeding into next year, with current announcements bringing the deficit to at least $90 billion in 2021-2022,” it said, noting that extensions of existing government supports could add $40 billion to deficits through the end of 2021 “even before new spending announcements.”
LIBERALS TO SPEND $100B TO JOLT POST-PANDEMIC ECONOMY AFTER POSTING RECORD $381B DEFICIT
G&M - Kathleen Harris (2020-11-30)
The short-term stimulus package is valued at $70 billion to $100 billion over roughly three years. The government says the stimulus spending — intended to build a greener, more inclusive, more innovative and competitive economy — will launch after a vaccine is distributed and life begins to return to normal.
PROVINCES PUSH FREELAND TO DELAY PLANNED BUMP IN CPP PREMIUMS IN ECONOMIC UPDATE
FP - CP (2020-11-27)
Provincial finance ministers have quietly prodded Finance Minister Chrystia Freeland to pause planned increases in premiums workers and businesses pay into the Canada Pension Plan.
THE TOP CONTENDERS TO RUN BIDEN'S FINANCIAL AGENCIES
Reuters - Pete Schroeder, Michelle Price, Katanga Johnson (2020-11-27)
The CFPB director is a critical role for progressives such as Senator Elizabeth Warren who believe the agency can help tackle wealth inequality and racial injustice. A U.S. Supreme Court ruling in June handed Biden the power to fire Republican President Donald Trump’s CFPB director, Kathy Kraninger, and many policy experts expect the former vice president to quickly remove her after he takes office on Jan. 20.
BANK OF CANADA CHIEF DEFENDS BOND PURCHASES FROM POLITICAL ATTACKS
Bloomberg - Shelly Hagan (2020-11-27)
In parliamentary testimony on Thursday, Macklem faced questions from opposition Conservative Party lawmakers over the central bank’s quantitative easing program, which has been used to buy nearly C$200 billion ($154 billion) in federal government bonds since April.
TOUGHER CAPITAL RULES FOR BATCHES OF BAD LOANS
Investment Executive - James Langton (2020-11-27)
The Basel Committee noted that it began working on the capital rules for non-performing loan securitizations before the onset of Covid-19.
CANADA’S BANKING REGULATOR CAUTIONS AGAINST LIFTING BAN ON BANKS RAISING DIVIDENDS TOO SOON
G&M - Staff (2020-11-25)
Canada’s banking regulator is cautioning against lifting restrictions on banks’ dividend payments and share buybacks too soon as cases of the novel coronavirus spike again.
WITH JANET YELLEN AT TREASURY, JOE BIDEN SIGNALS FURTHER BLURRING OF FISCAL, MONETARY POLICIES
G&M - KONRAD YAKABUSKI (2020-11-25)
In nominating Janet Yellen to become his Treasury secretary, president-elect Joe Biden has opted for a steady hand and consensus-builder to steer U.S. fiscal policy just as economists increasingly warn the country is poised to slip back into recession.
BANK OF CANADA DEPUTY DOWNPLAYS RISKS OF CONSUMER DEFAULT WAVE
FP - Shelly Hagan (2020-11-25)
Signs of overwhelming financial strain are few, and the risk of a wave of consumer defaults seems low, Deputy Governor Toni Gravelle said in remarks via video conference to the Autorite des marches financiers. Almost all of the households with expired debt deferrals have resumed repayments, and government measures are helping businesses in many sectors manage cash flows, he said.
FRANCE DEMANDS DIGITAL TAX PAYMENTS FROM US TECH GROUPS
Irish Times - Aime Williams, Hannah Murphy, Victor Mallet (2020-11-25)
BRUSSELS CRITICISED FOR GIVING BLACKROCK SUSTAINABLE FINANCE CONTRACT
FT - Mehreen Khan, Siobhan Riding (2020-11-25)
Emily O’Reilly, the EU’s independent ombudsman, on Wednesday said the European Commission’s decision to give the world’s largest fund manager a contract worth €280,000 had exposed the weakness of Brussels procedures on conflicts of interest when hiring from the private sector to advise on major policy areas.
THE CANADIAN BANKING SYSTEM THROUGH THE PANDEMIC: WHERE WE ARE AND WHERE WE ARE GOING
OSFI - OSFI (2020-11-25)
In the first quarter that was reported after the onset of the pandemic, we hit what I like to call the “downturn trifecta”: [1] Loan growth rose (supporting the economy). [2] Loan loss provisions went up (because of the downturn). And [3] market participants were unconcerned by the decline in bank capital levels. This was a textbook example of how the capital regime should work during a downturn, one where the banking system is able to absorb shocks rather than forced to amplify them.
FEDERAL GOVERNMENT SPENDS $5-MILLION ON OUTSIDE CONSULTANTS FOR LEEFF EMERGENCY LOAN PROGRAM
G&M - Bill Curry (2020-11-24)
The federal government has spent nearly $5-million on outside consultants to set up a COVID-19 emergency support program for large companies that has delivered just two loans since launching six months ago.
CHRYSTIA FREELAND TO PROVIDE BUDGET UPDATE ON NOV. 30
FP - Kate Bolongaro (2020-11-24)
Finance Minister Chrystia Freeland told lawmakers Monday that her department will release new deficit projections on Nov. 30. The economic statement could also include details of new permanent spending on long-term priorities including childcare.
TRUMP ADMINISTRATION GIVES GREEN LIGHT TO PROCEED WITH BIDEN TRANSITION
Reuters - Jeff Mason, Trevor Hunnicutt (2020-11-24)
After weeks of waiting, President Donald Trump’s administration on Monday cleared the way for President-elect Joe Biden to transition to the White House, giving him access to briefings and funding even as Trump vowed to continue fighting the election results.
BIDEN TO NAME YELLEN TO TREASURY TO LEAD U.S. FROM SHARP ECONOMIC DOWNTURN
Reuters - Trevor Hunnicutt, David Lawder (2020-11-24)
President-elect Joe Biden is expected to nominate former Federal Reserve Chair Janet Yellen as U.S. Treasury secretary, breaking a 231-year gender barrier and putting a seasoned economist and labor market expert in charge of leading the country out of the steepest downturn since the Great Depression.
U.K., CANADA ON BRINK OF TRADE AGREEMENT, REPLACING EU DEAL
Bloomberg - Joe Mayes, Kait Bolongaro, Tim Ross, and Shelly Hagan (2020-11-19)
The agreement would be a major boost to U.K. Prime Minister Boris Johnson in his efforts to plot a new course for Britain as a global trading nation outside the EU. An announcement is expected within days, according to people familiar with the matter who spoke on condition they not be identified.
CANADA NEEDS TO PICK UP PACE ON TACKLING CLIMATE CHANGE, TIFF MACKLEM SAYS
CBC - Jordan Press (2020-11-18)
Canada's top central banker is making a plea for the country to more quickly address the impacts of climate change to avoid any economic ripple effects on households and businesses.
ITALY TO SCRAP BAD LOAN LAW THAT COULD HAVE SAVED BANKS BILLIONS
Bloomberg - Chiara Albanese and Sonia Sirletti (2020-11-18)
The government decided not to extend into 2021 a tax benefit introduced earlier this year to facilitate the disposal of non-performing loans held on the balance sheets of Italian banks. Lenders and customers have been severely hit by the pandemic crisis.
FOREIGN MINISTER FRANçOIS-PHILIPPE CHAMPAGNE SAYS OTTAWA POISED TO ACT AGAINST CHINA’S INTERFERENCE IN CANADA
G&M - Robert Fife (2020-11-18)
Facing parliamentary pressure to stand up to Beijing’s use of covert agents to target Canadians, Foreign Affairs Minister François-Philippe Champagne says Ottawa is planning new measures to crack down on these kinds of intimidation tactics.
MOVING ON: BANK OF CANADA’S WILKINS READY TO ‘EXPLORE THE NEXT CHAPTER’
G&M - DAVID PARKINSON (2020-11-16)
Ms. Wilkins sat down for an interview via video conference just days after she had informed the bank’s board that she would step down Dec. 9, five months before the end of her seven-year term – ending a nearly 20-year career at the central bank.
CURRENCY WARS HAVE BEEN MISSING DURING THIS CRISIS, BUT IT ONLY TAKES A SPARK
FP - Kevin Carmichael (2020-11-16)
The most skittish currency traders will have taken note. The Bank of Canada has only mentioned the dollar in nine of its 23 policy statements since the start of 2018, so policy-makers might have been sending a signal that they thought the dollar was getting too strong: a form of stimulus known as “jawboning” or “jaw-jaw” that has been known to to move markets in favourable directions.
BANK OF CANADA AND OSFI LAUNCH PILOT PROJECT ON CLIMATE RISK SCENARIOS
OSFI - OSFI (2020-11-16)
The Bank of Canada and the Office of the Superintendent of Financial Institutions (OSFI) today announced plans for a pilot project to use climate-change scenarios to better understand the risks to the financial system related to a transition to a low-carbon economy. A small group of institutions from the banking and insurance sectors will participate voluntarily in the project.
CHRISTINE LAGARDE SAYS HER 'HUNCH' IS THAT ECB WILL ADOPT DIGITAL CURRENCY
FP - Alexander Weber (2020-11-13)
The ECB took a major step last month by launching a public consultation that runs until the middle of January. Policy makers intend to decide around mid-2021 whether to initiate a full-fledged project and prepare for a possible launch.
WILKINS SAYS CANADA WILL EXIT PANDEMIC WITH REDUCED POTENTIAL
Bloomberg - Shelly Hagan (2020-11-13)
The Bank of Canada’s top deputy said the country is likely to come out of the pandemic with a lower outlook for potential growth and permanent labor force scarring, and that conventional wisdom must be challenged to find solutions.
TOP CENTRAL BANKERS: ECONOMY NEEDS HELP DESPITE VACCINE NEWS
Investment Executive - David McHugh (2020-11-13)
Speaking at an online conference held by the European Central Bank, Powell, Bank of England governor Andrew Bailey and European Central Bank head Christine Lagarde emphasized the longer-term threat to the economy from the pandemic while welcoming the preliminary results showing a vaccine by BioNTech and Pfizer was highly effective.
OSC TO LEAVE FEES ALONE FOR NOW
Investment Executive - James Langton (2020-11-13)
“Our analysis indicates that maintaining current fee levels and leveraging our cash position will ensure that we can continue to deliver on our priorities,” the OSC said.
CHINA DEALS 'SEVERE BLOW' TO HONG KONG FREEDOMS, EU SAYS
Reuters - Staff (2020-11-12)
The European Union called on Beijing on Thursday to immediately reverse new rules to disqualify elected legislators, saying the decision was a “severe blow” to the former British colony’s autonomy.
WAS THE BANK OF AMSTERDAM THE WORLD’S FIRST CENTRAL BANK?
FT - Claire Jones (2020-11-12)
The Bank of Amsterdam is to central banking history what Little Richard is to rock ‘n’ roll. While the public might like to think it was Elvis or the Fab Four that invented it, the purists know they merely popularised it.
STEPHEN POLOZ ON INTEREST RATES, OUR OIL INDUSTRY AND THE K-SHAPED RECOVERY — PODCAST
FP - Gabriel Friedman (2020-11-11)
In terms of Canada’s economic recovery, Poloz said that the government’s income support programs have been critical because it’s people on the lower end of the income scale who have been hurt the worst in this crisis. He sees a K-shaped economic recovery — in which some parts of the economy bounced back, but other parts may be in serious trouble.
JAPANIFICATION STALKS NEW ZEALAND DEBT THAT’S 37% OWNED BY RBNZ
Bloomberg - Masaki Kondo (2020-11-10)
The Reserve Bank of New Zealand’s growing dominance of its bond market is sparking unfavorable comparisons with Japan.
BANK OF CANADA FURTHER CURTAILING EMERGENCY MEASURES
Investment Executive - James Langton (2020-11-10)
Citing further improvement in financial market conditions, the Bank of Canada is continuing to pull back liquidity support programs that were adopted in response to the disruptions caused by Covid-19.
B.C.’S ANTI-MONEY LAUNDERING EFFORT FLAWED: C.D. HOWE
Investment Executive - James Langton (2020-11-10)
Among other things, the report warned that the registry’s identification information isn’t actively verified, that the searchability and discoverability of information is “unreasonably restricted,” and that the penalties for filing false information are unlikely to serve as a meaningful deterrent.
FEDS HAVE WIGGLE ROOM TO SPEND MORE, PBO SAYS
Investment Executive - CP (2020-11-09)
Based on the budget officer’s calculations, the government could increase spending, reduce taxes, or a combination of the two to the tune of $19 billion and still reduce the debt-to-GDP ratio over time to pre-pandemic levels.
LOCKDOWN BRITAIN: THE CURE IS WORSE THAN THE DISEASE.
Youtube - Nigel Farage video (2020-11-09)
I am back in the UK giving my latest update on lockdown Britain and the US election.
AIRLINES WIN CHANGE OF HEART IN OTTAWA AS GOVERNMENT CONSIDERS BAILOUT LOANS
G&M - Andrew Willis (2020-11-09)
The federal Liberals are embracing support for Canada’s airlines after being told domestic carriers are losing their most lucrative line of business – international flights – to government-backed rivals.
CANADIAN BUSINESSES SEE BENEFITS IN DIVIDED U.S. GOVERNMENT AS THEY PREPARE TO NAVIGATE POLITICAL GRIDLOCK
G&M - Mark Rendell, James Bradshaw (2020-11-05)
Canadian business leaders are preparing to navigate political gridlock south of the border, with the U.S. Congress appearing to split between the Democrats and Republicans, reducing the likelihood of a strong policy shift to the left.
BIDEN EDGES CLOSER TO WHITE HOUSE WIN AS TRUMP MOUNTS LEGAL CHALLENGE
G&M - AP (2020-11-05)
Democrat Joe Biden moved closer to victory in the U.S. presidential race on Thursday as election officials tallied votes in the handful of states that will determine the outcome and protesters took to the streets.
BANK OF CANADA BEGINS SEARCH FOR NEW TOP DEPUTY AFTER WILKINS
Bloomberg - Shelly Hagan (2020-11-05)
With Carolyn Wilkins moving on when her term ends May 1, the Ottawa-based central bank published the job posting Wednesday. The search for her replacement will be undertaken by recruiting firm Boyden.
WHY CENTRAL BANKERS GOT SERIOUS ABOUT DIGITAL CASH
Bloomberg - Why Central Bankers Got Serious About Digital Cash (2020-11-05)
What central banks once sneered at, they’re now scrambling to master. Back when Bitcoin, the world’s first cryptocurrency, was seen as the province of anarchists and drug dealers, it was easy for the world’s central bankers to keep their distance. That changed in a hurry after Facebook Inc. proposed creating its own digital currency, Libra. Suddenly, the concept was seen as both practical and as a potential threat to existing monetary regimes. The central banks of China, the euro area, the Bahamas and others have been experimenting in the field, while others, including the U.S. Federal Reserve and Bank of England, are conducting research but not plunging in, at least for now.
1. What was so alarming about Libra?
BANK OF CANADA’S CAROLYN WILKINS MOVES HER DEPARTURE DATE TO DECEMBER
G&M - DAVID PARKINSON (2020-11-05)
Carolyn Wilkins, the Bank of Canada’s second-in-command, has decided to leave the bank in early December, five months before the end of her term.
FEDERAL RESERVE HOLDS POLICY STEADY AND SIGNALS READINESS TO DO MORE TO SUPPORT ECONOMIC RECOVERY
G&M - HOWARD SCHNEIDER AND ANN SAPHIR (2020-11-05)
The Federal Reserve kept its loose monetary policy intact on Thursday and pledged again to do whatever it can in coming months to sustain a U.S. economic recovery threatened by a spreading coronavirus pandemic and facing uncertainty over a still undecided presidential election.
FED SIGNALS READINESS TO DO MORE FOR ECONOMY AS VIRUS RAGES
Investment Executive - Martin Crutsinger (2020-11-05)
The Fed announced no new actions after its latest policy meeting but left the door open to provide further assistance in the coming months. The central bank again pledged to use its “full range of tools to support the U.S. economy in this challenging time.” The economy in recent weeks has weakened after mounting a tentative recovery from the deep pandemic recession in early spring.
EXTENSION OF EXCLUSIONS FROM THE LEVERAGE RATIO EXPOSURE MEASURE
OSFI - OSFI (2020-11-05)
The Office of the Superintendent of Financial Institutions (OSFI) continues to actively monitor the evolving pandemic and assess its impacts on the financial and operational capacity of deposit-taking institutions, or DTIs.
ONTARIO STEPS ON TO A SLIPPERY DEBT PATH WITH BUDGET
G&M - Patrick Brethour (2020-11-05)
Ontario’s finances were sustainable, if only narrowly, before the pandemic hit.
U.S. DEBT BURDEN POSES MAJOR CHALLENGE FOR NEXT PRESIDENT
G&M - Patrick Brethour (2020-11-04)
The United States is already on a perilous fiscal path, with unending deficits forecast and the national debt headed to its highest level in the history of the republic by the end of the decade.
THE BANK OF CANADA IS SUPPOSED TO BE INDEPENDENT, BUT IT MIGHT NOT HURT IF IT KNEW WHAT FINANCE WAS UP TO
FP - Kevin Carmichael (2020-11-04)
Those comments will have bothered a lot of people. Poilievre politicized a Crown institution that worries a great deal about its independence from the whims of partisan politics. Much of its credibility relies on the assumption that policy-makers will set interest rates based on economic conditions, not the electoral needs of their political masters.
FISCAL CONSERVATISM VERSUS PONZI NEO LIBRALISM
BankNews.TV - Mark Sibthorpe (2020-11-04)
This video is intended to give viewers an understanding of the economic ideas behind Canada's potential housing bubble. This video also explains why Siddal, President and CEO of the CMHC, was likely pushed from his post.
CANADA MUST MERGE INVESTMENT INDUSTRY REGULATORS, FORMER OSC CHAIRS SAY
G&M - Clare O'Hara (2020-11-04)
This is the view of several former chairs of the Ontario Securities Commission and the current head of the province’s modernization task force, on the future of the two self-regulatory organizations (SROs) that oversee Canada’s investment advisory industry.
LEBANON’S CENTRAL BANK HINDERING EFFECTIVE AUDIT, PREMIER SAYS
Bloomberg - Dana Khraiche (2020-11-03)
SOUTH AFRICA LEANS ON BANKS TO SPUR ECONOMIC RECOVERY
FT - Joseph Cotterill (2020-11-03)
When South African president Cyril Ramaphosa recently extolled in parliament his government’s provision of R500bn ($31bn) to steer the nation’s battered economy through the pandemic, there was some awkward fine print for the country’s banks.
BANK OF ENGLAND FACES NEW DOUBTS OVER POTENCY OF BUYING BONDS
FT - Tommy Stubbington (2020-11-03)
Investors are beginning to question how long the Bank of England can rely on bond buying as its main tool for stimulating the UK economy. Markets are braced for the BoE to announce a fresh round of quantitative easing at its policy meeting on Thursday, with many economists pencilling in an extra £100bn of purchases on top of the £300bn announced so far this year, to tackle the economic impact of a resurgence of Covid-19.
THE MINISTER OF FINANCE SETS COURSE RESOLUTELY FOR WHO KNOWS WHERE
G&M - Andrew Coyne (2020-11-01)
First, the good news. The Finance Minister of Canada is not, contrary to rumours, an advocate of Modern Monetary Theory. Neither is she a disciple of Ayn Rand.
SBA ISSUES GUIDANCE ON CHANGES IN OWNERSHIP AND FULL FORGIVENESS EASED FOR SMALLER LOANS
Banking Exchange - Jeffrey Wagner (2020-11-01)
On October 8, 2020, the SBA and Treasury issued an Interim Final Rule eliminating forgiveness reductions resulting from either a reduction in a borrower's number of full-time equivalent employees or individual employee pay if the borrower's loan (when aggregated with PPP loans to any of its affiliates) does not exceed $50,000.
WHY FEDERAL CONSERVATIVES SHOULD BE CONCERNED ABOUT SASKATCHEWAN'S ELECTION RESULT
CBC - Kory Teneycke (2020-10-30)
Despite these limitations, the Buffalo Party finished third overall in the popular vote and scored strong second-place victories in four bedrock Conservative ridings.
OSC UNVEILS CHARTER FOR OFFICE TO PROMOTE INNOVATION AND REDUCE REGULATORY BURDEN
FP - Barbara Schecter (2020-10-30)
A charter unveiled Thursday by a newly created branch of the Ontario Securities Commission lays the groundwork for new forms of capital raising, more avenues for innovators and a reduced regulatory burden.
BANK OF CANADA OUTLOOK SIGNALS THE LEGACY OF COVID-19 CRISIS WILL LINGER FOR YEARS
FP - Kevin Carmichael (2020-10-29)
The Bank of Canada is setting up to run a high-pressure economy until at least 2023, a delicate operation that will require lots of tinkering along the way.
BANK OF CANADA GOVERNOR SAYS DIGITAL DOLLAR PROJECT MOVING PAST TRIAL STAGE
Coindesk - Sebastian Sinclair (2020-10-29)
In an interview with Reuters published Thursday, Bank of Canada (BoC) Governor Tiff Macklem said his institution is working with G7 member states on its plans for a central bank digital currency (CBDC).
ANCHORS AWEIGH!
FP - Terence Corcoran (2020-10-28)
The last monetary report in July was a grim synopsis of looming economic decline. To quote one passage: “The large declines in both demand and supply are extraordinary. Over a longer horizon, the pandemic could cause large and lasting changes in consumer preferences and other sources of demand. Similarly, the scope of possible structural changes to a post-pandemic economy is vast, and the timing of adjustments will remain unknowable as long as COVID-19 continues to be a threat.”
BANK OF CANADA TO REDUCE BOND PURCHASES, RECALIBRATE PROGRAM AS RECOVERY ENTERS LESS CERTAIN PHASE
G&M - DAVID PARKINSON (2020-10-28)
The Bank of Canada said it will reduce its Canadian government bond purchases to $4-billion a week while shifting more of its purchases to longer-term bonds, as the bank recalibrates its quantitative easing to deliver stimulus to an economy that it cautions is headed into a slowing and less certain phase of recovery.
BANK OF CANADA RATE ANNOUNCEMENT
Central 1 - Helmut Pastrick (2020-10-28)
The Bank of Canada’s monetary stance was little changed following today’s announcement except for an adjustment to its bond-buying program. The Bank is focusing on longer-term bond maturities, which have more infl uence on household and business borrowing costs, than shorter-term bonds and treasury bills. In addition, their weekly bond purchases will be reduced to four billion per week from fi ve billion. The Bank purchased shorter-term fi nancial assets in the early stage of the pandemic to provide liquidity to the market but that is no longer required and the Bank’s shift to longer-term bonds is intended to support and promote economic growth.
CANADIAN NEWS PUBLISHERS CALL ON GOVERNMENT TO TAKE ON GOOGLE/FACEBOOK, URGE ADOPTION OF THE AUSTRALIAN MODEL
G&M - Josh O'Kane (2020-10-26)
Canadian news publishers want government approval to seek compensation from digital giants such as Facebook Inc. and Alphabet Inc.'s Google for using their content, including the power to bargain as an industry to negotiate the terms.
BUSINESS ON BIDEN: NOT SO BAD, GIVEN THE ALTERNATIVES
WSJ - Greg IP, Ken Thomas (2020-10-26)
Many executives see the Democratic nominee as less adversarial than Sanders or Warren, and less unpredictable than Trump. Yet political attitudes vary considerably by industry and type of business.
ALL THE PRESIDENT’S DEBTS: TO WHOM TRUMP OWES MONEY
FT - Robert Armstrong, Joe Rennison (2020-10-26)
These are tough times in the real estate market. The Covid-19 crisis has hit asset values, particularly commercial real estate in cities such as New York. Investors holding debt with upcoming maturities are preparing for tricky negotiations with their debtors. The negotiations will be trickier if the debtor is the president of the United States. Virtually all of Donald Trump’s debt — there is at least $1.1bn of it, according to his government financial disclosures and other documents — is backed by real estate, mostly linked to a small number of buildings and golf courses that form the core of the Trump business empire. About $900m of that debt will come due in Mr Trump’s second term, should he win the November 3 presidential election.
MARKETS WAIT FOR POLICY HINTS IN BANK OF CANADA’S INTEREST RATE DECISION
G&M - DAVID PARKINSON (2020-10-26)
Balancing a stronger-than-expected economic rebound with a second wave of the COVID-19 pandemic, the Bank of Canada looks unlikely to make any dramatic moves in this week’s monetary policy decision. But the financial markets will nevertheless be looking for hints on where the central bank will take its highly stimulative policy position from here.
BANK OF CANADA ALREADY PUSHING THE LIMITS OF THE DOMESTIC BOND MARKET
FP - Theophilos Argitis (2020-10-26)
Market operation data from the Bank of Canada show benchmark bonds — those currently being sold by the government, as opposed to older debt — are making up a growing share of the central bank’s secondary market purchases.
TIME FOR BOC TO PULL BACK ON QE, NBF SUGGESTS
Investment Executive - James Langton (2020-10-26)
In a research note, NBF said the bank’s policy rate is expected to remain at its rock-bottom level of 0.25% at its rate decision on Wednesday, and likely until 2023 at least.
GOVERNMENT SPENDING IS BECOMING A PROBLEM AND PRINTING MONEY IS A DANGEROUS SOLUTION
FP - Martin Pelletier (2020-10-22)
That appears to be the case here in Canada, where the Liberal minority government — backstopped by the NDP — is looking to implement massive, costly programs including a national daycare system, pharmacare, affordable housing and green initiatives.
ANALYSIS: BIDEN TAX INCREASE MIGHT NOT BE SO BAD FOR BIG BANKS
Reuters - David Henry (2020-10-22)
Banks were big beneficiaries of tax cuts under President Donald Trump, making a reversal seem ominous. But a second look at what might happen if Biden were to win the election and Democrats were to win control of the U.S. Senate suggests the pain might not be so bad.
TRUDEAU GOVERNMENT SHOULD HEED LOOMING RISKS TO FEDERAL FINANCES
G&M - JASON CLEMENS AND MILAGROS PALACIOS (2020-10-22)
The federal government and several prominent economists have played down the near-term risks to federal finances. Some have actually characterized Ottawa’s financial position as basically “sound.” Such analyses are premised on questionable assumptions and ignore the country’s past experiences with perennial deficits.
U.K. GOVERNMENT BORROWING HITS RECORD
Investment Executive - AP (2020-10-22)
The government borrowed a net 36.1 billion pounds (US$47.1 billion) in September, pushing the total for the first six months of the year to 208.5 billion pounds, the Office for National Statistics (ONS) said Wednesday. That’s the highest figure since records began in 1993.
GOVERNMENT SPENDING PLANS WOULD PUSH FEDERAL DEBT BURDEN BACK TO 1990S LEVELS, DRUMMOND WARNS
G&M - Patrick Brethour (2020-10-20)
The Liberal government’s expansive spending plans would push the federal debt burden back to the dangerous levels of the 1990s over the next decade, according to a report from one of the architects of Ottawa’s successful effort to defuse Canada’s debt crisis a quarter century ago.
LIBERALS THREATEN ELECTION IF PROPOSED ‘ANTI-CORRUPTION’ COMMITTEE IS DEBATED
G&M - MARIEKE WALSH, PAUL WALDIE (2020-10-20)
The Liberals are threatening opposition parties with an election if the Conservatives move ahead Tuesday with their attempt to create a special “anti-corruption” committee in the House of Commons.
U.S. JUSTICE DEPARTMENT FILES LANDMARK ANTITRUST CASE AGAINST GOOGLE
G&M - MICHAEL BALSAMO AND MARCY GORDON (2020-10-20)
The Justice Department on Tuesday sued Google for antitrust violations, alleging that it abused its dominance in online search and advertising to stifle competition and harm consumers.
TRUDEAU DARES OPPOSITION TO FIGHT ELECTION AMID SECOND COVID WAVE
Bloomberg - Kait Bolongaro (2020-10-20)
Justin Trudeau warned opposition lawmakers they will trigger an election in Canada if they approve the creation of an “anti-corruption” committee.
INFLATION NUMBERS REALLY ARE BEING DISTORTED BY COVID-19 SPENDING, NEW RESEARCH SHOWS SOCIAL SHARING
CBC - Don Pittis (2020-10-19)
New research by two of Canada's most credible analytic agencies appears to prove that critics — who have complained that inflation data has been distorted by COVID-19 both here and in the U.S. — actually got it right.
BANK OF CANADA PHASING OUT 3 PROGRAMS SET UP IN EARLY DAYS OF COVID-19 TO PROVIDE EMERGENCY LIQUIDITY
CBC - CBC (2020-10-19)
The mortgage bond program accomplished this by having the central bank buy up billions of dollars worth of insured mortgages from lenders and move them on to its balance sheet, which makes it easier for lenders to go out and lend money to someone else.
THE PROBLEM WITH CANADA'S MONETARY POLICY REGIME
FP - Kevin Carmichael (2020-10-19)
The Bank of Canada’s mandate is up for renewal next year, and this time will be different. The central bank has set a new standard for how an arm’s length Crown corporation should engage with the people it ultimately serves.
TRUDEAU IS PREPARING TO TEST LIMITS OF DEBT-FINANCED SPENDING
Bloomberg - Kait Bolongaro and Theophilos Argitis (2020-10-19)
Justin Trudeau’s Covid-19 support programs gave Canada one of the world’s largest budget deficits, and now the prime minister is ready to test public appetite for more red ink.
FED, CENTRAL BANKS WILL FIND EXIT FROM MASSIVE STIMULUS IMPEDED
Bloomberg - Rich Miller (2020-10-19)
The Federal Reserve and other central banks will eventually discover that breaking up isn’t easy after partnering with their governments and the financial markets to avert a pandemic-driven depression.
THE DIGITAL CURRENCY ARMS RACE: CENTRAL BANKS ENTER THE FRAY TO PROTECT NATIONAL SOVEREIGNTY
G&M - Barry R Campbell (2020-10-19)
A group of seven central banks, including Canada’s, have issued a statement indicating they are working together on common principles and key features for a viable central bank digital currency, or CBDC.
MONETARY POLICY: WHAT DOES THE FUTURE HOLD
Investment Executive - Alizee Calza (2020-10-19)
Every five years, the Bank of Canada renews its agreement on the country’s inflation-control target. The BoC is due to announce its new framework in 2021, and this time around, it has asked Canadians for their opinions.
BANK OF CANADA STEPS UP FINANCIAL BENCHMARK OVERSIGHT
Investment Executive - James Langton (2020-10-19)
In a release, the bank said that while new risk-free rates (such as CORRA) are expected to become the primary financial benchmarks around the world, they are not necessarily ideal for all products, “so having robust credit-sensitive benchmarks may also be desirable,” it said.
OSFI REVIEWING ITS ANTI-MONEY LAUNDERING RULES
Investment Executive - James Langton (2020-10-19)
OSFI said this new approach to AML supervision reflects an effort to “eliminate duplication” and reduce the regulatory burden.
US 2020 ELECTION: THE ECONOMY UNDER TRUMP IN SIX CHARTS
BBC - BBC (2020-10-19)
Reality Check verdict: It's true the economy was doing well prior to the pandemic - continuing a trend which began during the Obama administration - but there have been periods when it was much stronger.
BANK OF CANADA BECOMING ‘ATM FOR TRUDEAU,’ CONSERVATIVES CAUTION
Bloomberg - Theophilos Argitis and Kait Bolongaro (2020-10-16)
Canada’s main opposition party is cautioning the central bank against financing Justin Trudeau’s spending plans beyond immediate pandemic emergency measures, thrusting the Bank of Canada into a political firestorm.
CANADA INFRASTRUCTURE BANK PAID $3.8-MILLION FOR TERMINATIONS AMID LEADERSHIP SHAKEUP
BILL CURRY AND CHRIS HANNAY - Canada Infrastructure Bank paid $3.8-million for terminations amid leadership shakeup (2020-10-14)
The Canada Infrastructure Bank paid $3.8-million in termination benefits as part of a major shakeup of the organization’s senior management, documents show.
IMF HEAD WARNS AGAINST PULLING PLUG TOO EARLY ON COVID-19 SPENDING
G&M - Reuters (2020-10-14)
The IMF forecasts a partial and uneven recovery in 2021, with global growth expected to reach 5.2 per cent, but warns that significant risks remain, including the resurgence of the virus.
IMF SAYS PUBLIC DEBT SOARING TO NEARLY 100% OF GLOBAL GDP AS GOVERNMENTS SPEND TO BATTLE CORONAVIRUS
G&M - David Lawder (2020-10-14)
Massive government spending to battle the coronavirus pandemic will push public debt to a record of nearly 100 per cent of global economic output this year, but the run-up may be a one-off event if growth rebounds next year, the International Monetary Fund said on Wednesday.
CENTRAL BANKS MUST MOVE FASTER ON DIGITAL CURRENCIES AMID COVID-19, BANK OF CANADA SAYS
CBC - CP (2020-10-14)
A Bank of Canada official says pandemic-related shifts in how people shop means central banks must speed up work on creating their own digital currencies.
'BANK WATCHERS' SHOW WHY BANK OF CANADA IS TAKING COMMUNICATIONS INTO OWN HANDS
FP - Kevin Carmichael (2020-10-14)
“Relying on the conventional media to diffuse their message to the public can be ineffective because many households no longer read newspapers and even if they do, individuals discount reports from the news media,” the authors said in their paper.
BANK OF CANADA IS CLOSE TO ITS POLICY LIMITS, POLOZ SAYS
FP - Shelly Hagan (2020-10-13)
The former governor, who stepped down from the Bank of Canada after his term ended in June and is currently a special adviser at law firm Osler, Hoskin and Harcourt LLP, cited a report on Tuesday by the International Monetary Fund that estimated Canada’s general government gross debt will rise to 115 per cent of gross domestic product this year, from 89 per cent in 2019. Policy makers don’t have much experience with such large numbers, but provided interest rates stay low, it’s more of a “debt service issue,” Poloz said.
WAYS TO DEFUSE CURRENCY WARS
Reuters - Mark Sobel (2020-10-13)
Earlier this year, the U.S. Commerce Department issued a regulation that allows duties to be applied on imports from countries whose currencies are deemed to be undervalued. Already, with the help of a Treasury Department undervaluation finding against the Vietnamese dong, Commerce is pursuing such a case against Vietnamese tires. A Treasury finding in a Chinese tie-twist case may soon be reached. Others may be next in line.
ADVANCED GOVERNMENTS ACT AS THOUGH THERE'S 'NO COST TO DEBT' AND IT 'WON'T END WELL'
Sky News - Video (2020-10-13)
The advanced governments of the world are conducting an extraordinary economic experiment and think there’s no cost to debt, but “it’s not going to end well”, according to the Australian’s Adam Creighton.
GET READY FOR FULL BREXIT TO KICK IN, U.K. GOVERNMENT URGES BUSINESSES
G&M - Reuters (2020-10-12)
Britain’s government on Sunday urged businesses to prepare for the end of the Brexit transition period, saying that they need to take action whether or not a trade deal with the European Union is clinched.
BANK OF ENGLAND ASKS BANKS HOW READY THEY ARE FOR SUB-ZERO RATES
G&M - HUW JONES AND WILLIAM SCHOMBERG (2020-10-12)
The Bank of England asked banks on Monday how ready they are for zero or negative interest rates, following up its announcement last month that it was considering how to take rates below zero if necessary.
GLOBAL WATCHDOGS AGREE RULES FOR STABLECOINS LIKE FACEBOOK'S LIBRA
Reuters - Huw Jones (2020-10-12)
Central banks set out to regulate cross-border stablecoins like Facebook’s planned Libra with a common approach on Tuesday, saying more rules may later be needed to ensure stability.
NEXT BIG SHIFT IN ECONOMICS TAKES SHAPE UNDER COVID SHADOW
Bloomberg - Alaa Shahine (2020-10-12)
A rare regime-change in economic policy is under way that’s edging central bankers out of the pivotal role they have played for decades.
Fiscal policy, which fell out of fashion as an engine of economic growth during the inflationary 1970s, has been front-and-center in the fight against Covid-19. Governments have subsidized wages, mailed checks to households and guaranteed loans for business. They’ve run up record budget deficits on the way -- an approach that economists have gradually come to support, ever since the last big crash in 2008 ushered in a decade of tepid growth.BOC’S MACKLEM WARNS COMING MONTHS ‘CRUCIAL’ IN GAUGING HOW CANADIAN HOUSEHOLDS, BUSINESSES WEATHER COVID-19 CRISIS
G&M - DAVID PARKINSON (2020-10-08)
Bank of Canada Governor Tiff Macklem acknowledged that the central bank’s adoption of record-low interest rates to fight the COVID-19 economic crisis has elevated the country’s financial risks, warning that “the next few months will be crucial” in determining how well Canadian households and businesses weather the strains from the crisis.
FOR THE BANK OF CANADA, WHAT DOES THE LINK BETWEEN MONETARY POLICY AND INEQUALITY MEAN?
G&M - Jeremy Kronick (2020-10-08)
A global pandemic that has crushed the economy. A stock market improbably rising in an economic downturn. Is it the job of the Bank of Canada to address this contradiction, and the inequality that arises?
CHINA AIMING FOR FIRST-MOVER ADVANTAGE IN BUILDING DIGITAL CURRENCY, ACCORDING TO JAPANESE OFFICIAL
G&M - Iain Withers, Anna Irrera, Tom Wilson (2020-10-08)
China is seeking to win a first-mover advantage in its efforts to develop a digital version of its currency, Japan’s top financial diplomat said on Thursday.
PATH TO RECOVERY LITTERED WITH DEBT RISKS, BANK OF CANADA GOVERNOR WARNS
FP - Kevin Carmichael (2020-10-08)
“As much as a bold policy response was needed, it will inevitably make the economy and financial system more vulnerable to economic shocks down the road,” Tiff Macklem said in a speech on Oct. 8.
BANK OF CANADA KEEPS DOOR OPEN TO POSSIBILITY OF NEGATIVE RATES
Bloomberg - Shelly Hagan (2020-10-08)
“We are not actively discussing negative interest rates at this point but it’s in our toolkit and never say never,” Macklem said Thursday via videoconference, after a speech to the Global Risk Institute.
FUND MANAGERS INVITED INTO BOC BACKSTOP
Investment Executive - James Langton (2020-10-07)
Starting Oct. 20, the central bank will allow buy-side firms, such as portfolio managers and pension funds, to participate in its corporate bond purchase program (CBPP).
FED MINUTES REFLECT ON SIZABLE ECONOMIC RISKS
Investment Executive - Martin Crutsinger (2020-10-07)
The Fed’s statement incorporated a policy change the central bank announced in August in which it will allow inflation to rise above its 2% target for a period of time to make up for the extended period over the past decade that annual inflation has been below the 2% target. That change is seen as allowing to keep interest rates lower for a longer period.
PANDEMIC INTENSIFIES POLICYMAKERS’ DATA NEEDS
Investment Executive - James Langton (2020-10-07)
According to a new report from the Fi