00000nam 2200000zi 4500 9.928160 CaOODSP 20240829103637 m o d f cr mn||||||||| 231004t20232023onca ob f000 0 eng d CaOODSP eng rda CaOODSP eng eng fre n-cn--- FB3-5/2023-51E-PDF Allen, Jason, author. Intermediary market power and capital constraints / by Jason Allen and Milena Wittwer. [Ottawa] : Bank of Canada = Banque du Canada, 2023. ©2023 1 online resource (ii, 39, 20 pages) : illustrations. text txt rdacontent computer c rdamedia online resource cr rdacarrier Staff working paper = Document de travail du personnel, 1701-9397 ; 2023-51 ISSN assigned to different series. "Last updated: October 4, 2023." Includes bibliographical references (pages 34-39). "We examine how intermediary capitalization affects asset prices in a framework that allows for intermediary market power. We introduce a model in which capital-constrained intermediaries buy or trade an asset in an imperfectly competitive market, and we show that weaker capital constraints lead to both higher prices and intermediary markups. In exchange markets, this results in reduced market liquidity, while in primary markets it leads to higher auction revenues at an implicit cost of larger price distortion. Using data from Canadian Treasury auctions, we demonstrate how our framework can quantify these effects by linking asset demand to individual intermediaries' balance sheet information"--Abstract, page ii. Includes abstracts in English and French. Intermediation (Finance) Canada Econometric models. Capital market Canada Econometric models. Capital assets pricing model. Intermédiation financière Canada Modèles économétriques. Marché financier Canada Modèles économétriques. Modèle d'évaluation des actifs financiers. Bank of Canada, issuing body. Staff working paper (Bank of Canada) 2023-51. (CaOODSP)9.806221 PDF 1.61 MB https://publications.gc.ca/collections/collection_2023/banque-bank-canada/FB3-5-2023-51-eng.pdf