Addicted to Ratings: The Case for Reducing Governments’ Reliance on Credit Ratings

Credit rating agencies have been blamed for their role in the recent financial crisis, notably for having assigned high ratings to complex financial instruments that yielded billions in losses to investors. As a consequence, a number of reforms have been proposed or introduced – including for example increased disclosure of rating methodologies. This Backgrounder argues that reducing the government use of credit ratings may be the single most important step towards restoring the credibility and integrity of rating agencies.Financial Services, credit-rating agencies (CRAs), third party credit risk assessment, nationally recognized statistical rating organizations (NRSROs)

Change is in the Cards: Competition in the Canadian Debit Card Market

As new entrants arrive in Canada’s debit card market, rule changes are needed to ensure a level playing field, and to enhance the potential benefits of competition for consumers and merchants. In a study released today, the author assesses the implications of the rapidly changing debit payment landscape. Bergevin makes recommendations for action to ensure that consumers and merchants are protected and that the system can evolve to serve them even better.financial services, debit card market, VISA, MasterCard, Interac

Putting Money Back into Monetary Policy: A Monetary Anchor for Price and Financial Stability

The Bank of Canada should pay closer attention to the effects of money and credit growth on inflation and asset markets. The authors contend that maintaining price stability should remain the Bank’s only formal goal, but say greater attention should be paid to asset market stability. Once the role of asset markets in the mechanics of inflation or price-level targeting is made explicit, such a policy will promote orderly asset market behaviour. This hinges on the role broader money and credit aggregates play in the transmission mechanism that links monetary policy to the behaviour of the rest of the economy.Monetary Policy, Bank of Canada, inflation, price stability, asset market stability, price-level targeting, broad money aggregate (M2+)

Core, What is it Good For? Why the Bank of Canada Should Focus on Headline Inflation

With inflation as measured by the Consumer Price Index (CPI) growing faster than the Bank of Canada’s 2 percent target, the Bank has pointed out that core CPI, which excludes items whose prices are especially volatile, is at or below target and, further, that the Bank anticipates total CPI eventually will converge with the core measure. While the Bank is certainly justified in using core CPI as one of many imperfect measures of underlying inflation, our results suggest that the Bank should, at a minimum, revisit the role of core within its inflation-targeting framework and consider de-emphasizing core CPI in its communications or as an operational guide.Monetary Policy, Bank of Canada, inflation, Consumer Price Index (CPI), core CPI

Room for Manoeuvre – Monetary Policy Over the Next Eighteen Months, and the Allure of Price-Level Targeting

Moving to price-level targeting from inflation-rate targeting could be a sound option for the Bank of Canada after 2011, when its current agreement with the Minister of Finance is up for renewal. However, the authors say the viability of that option rests on whether the Bank can maintain its credibility in monetary policy over the coming months, as it seeks a balance between providing support to the still fragile economic recovery and avoiding a resurgence of inflation above its 2 percent inflation target.Monetary Policy, Bank of Canada, price-level targeting, inflation-rate targeting, exchange rate

Better Barking for ABS: Reform Proposals for the Asset-Backed Securities Market

The market for asset-backed securities (ABS) – financial instruments backed by underlying assets such as mortgages – suffered a major setback in 2007, as a cascade of downgrades and defaults brought turmoil to credit markets and the world economy. Authorities in the United States have since proposed sweeping changes to the ABS market. The Canadian Securities Administrators, representing provincial securities commissions, recently released a discussion paper proposing similar reforms, which would require: (i) sharply enhanced transparency in ABS structures, (ii) CEO certification of the adequacy of such structures, and (iii) disclosure of previous asset repurchases by the securities’ sponsor.Financial Services, asset-backed securities (ABS), credit markets

The Costs of Inflexible Indexing: Avoiding the Adverse Fiscal Impacts of Lower Inflation

A lively debate is underway about replacing Canada’s 2 percent inflation target with a target for lower inflation or a target for the price level itself when Canada’s inflation-control arrangement expires at the end of 2011. Either change could reduce uncertainty about changes in the value of money over time, and potentially stabilize the economy as well. But such policies may involve costs; a long-standing concern is that rises versus falls in the price level may have different or asymmetrical impacts on the economy.monetary policy, Consumer Price Index (CPI), Bank of Canada, inflation control

Pour comprendre la « théorie générale » de la société de Robert Fossaert : étude schématique

Dans une oeuvre importante dont la parution a débuté en 1977, Robert Fossaert propose une théorie nouvelle de la société. Celle-ci s'appuie sur une définition originale des concepts de société, homme, nature, mode de production, formation sociale, formation économique, formation politique et formation idéologique. Cette conception est illustrée graphiquement.In what must be considered a major work, which began to appear in 1977, Robert Fossaert proposes a new general theory of society. His is an original approach to the concepts of society, man, nature, mode of production, social formation, economic formation, political formation and ideological formation. This is illustrated graphically