The Bank of Canada’s millions in balance-sheet losses are only the beginning
Sonja Chen and Trevor Tombe are professors of economics at the University of Calgary.
third-quarter financial results showed that for the first time, the bank incurred a net loss: $511-million. This is only the beginning.The bank’s revenue is largely derived from its asset holdings, which mainly included Government of Canada bonds and treasury bills. Prior to the COVID-19 pandemic, these bond holdings cost the bank very little, and their returns normally exceeded bank expenses by a wide margin.
Similarly, on the one hand, financial losses do not impede the bank’s ability to conduct monetary policy. It can, after all, create settlement balances on demand to purchase assets, and can adjust its policy rate at any time. And confidence in a country’s central bank affects its ability to conduct monetary policy and achieve low and stable
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Opinion: The Bank of Canada still lags in transparencyThe global surge in inflation has damaged the credibility of central banks. Read more.
Read more »
Opinion: The Bank of Canada still lags in transparencyThe global surge in inflation has damaged the credibility of central banks. Read more.
Read more »
BoC's forward guidance strategy 'backfired': Chief economist - BNN BloombergThe Bank of Canada's experiment with forward guidance during the pandemic backfired on the central bank, according to TD Bank's chief economist.
Read more »
Opinion: With Hydro-Québec CEO’s departure, province sets sights on new hydro damsSophie Brochu’s resignation, effective in April, clears the way for the Legault government to appoint a new Hydro-Québec chief who can work with Economy Minister Pierre Fitzgibbon
Read more »
OPINION: Morneau admits COVID-19 policies were seriously flawedFormer finance minister Bill Morneau recently admitted the federal government “lost the agenda” during the pandemic.
Read more »
OPINION: Morneau admits COVID-19 policies were seriously flawedFormer finance minister Bill Morneau recently admitted the federal government “lost the agenda” during the pandemic.
Read more »