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008160815s2016    oncd    ob   f000 0 eng d
040 |aCaOODSP|beng
041 |aeng|bfre
043 |an-cn---
0861 |aFB3-5/2016-38E-PDF
24504|aThe global financial cycle, monetary policies and macroprudential regulations in small, open economies |h[electronic resource] / |cby Gregory Bauer ... [et al.].
260 |a[Ottawa] : |bBank of Canada, |cc2016.
300 |aii, 31 p. : |bgraphs.
4901 |aStaff Working Paper, |x1701-9397 ; |v2016-38
500 |aAugust 2016.
504 |aIncludes bibliographical references.
5203 |aThis paper analyzes the implications of the global financial cycle for conventional and unconventional monetary policies and macroprudential policy in small, open economies such as Canada. The paper starts by summarizing recent work on financial cycles and their growing correlation across borders. The resulting global financial cycle may be followed by a financial crisis that is quite costly. The cycle causes time variation in global risk premia in fixed income, equity and foreign exchange markets. In turn, time-varying global risk premia affect the transmission mechanisms of both conventional and unconventional monetary policies in small, open economies. While there are large costs associated with financial crises, the paper summarizes new work showing that the central banks’ leaning against the effects of the global financial cycle would typically be too costly. The paper concludes with some suggestions for the formation of macroprudential policies that are designed to offset the financial imbalances that grow during the boom phase of the cycle.
69207|2gccst|aMonetary policy
69207|2gccst|aInternational markets
69207|2gccst|aEconomic analysis
7102 |aBank of Canada.
830#0|aStaff working paper (Bank of Canada)|x1701-9397 ; |v2016-38|w(CaOODSP)9.806221
85640|qPDF|s586 KB|uhttps://publications.gc.ca/collections/collection_2016/banque-bank-canada/FB3-5-2016-38-eng.pdf