00000nam 2200000za 4500 9.832355 CaOODSP 20221107145948 cr ||||||||||| 170214s2017 oncd ob f000 0 eng d CaOODSP eng eng fre n-cn--- FB3-6/2017-3E-PDF Fontaine, Jean-Sébastien. Repo market functioning when the interest rate is low or negative [electronic resource] / by Jean-Sébastien Fontaine, James Hately and Adrian Walton. [Ottawa] : Bank of Canada, c2017. ii, 19 p. : col. charts Bank of Canada staff discussion paper, 1914-0568 ; 2017-3 "January 2017." Includes bibliographical references. "This paper investigates how a low or negative overnight interest rate might affect the Canadian repo markets. The main conclusion is that the repo market for general collateral will continue to function effectively. However, changes to market conventions—such as the introduction of a charge for settlement fails—or other institutional changes may be required so that the repo market for specific collateral continues to support liquidity on the secondary market for government bonds. The historical experience shows that the special repo market in other jurisdictions can function effectively even if the overnight rate is negative. Closer examination suggests what specific circumstances can lead to persistent settlement fails in the specific collateral repo market. Specifically, the combination of (i) low or negative interest rates, (ii) large aggregate short positions in bonds, and (iii) economic or policy surprises may lead to persistent settlement fails"--Abstract, p. ii. Includes abstract in French. gccst Capital markets gccst Interest rates Hately, James. Walton, Adrian. Bank of Canada. Staff discussion paper (Bank of Canada) 2017-3 (CaOODSP)9.806273 PDF 1.18 MB https://publications.gc.ca/collections/collection_2017/banque-bank-canada/FB3-6-2017-3-eng.pdf