Careers

Role

The Department of Monetary and Financial Analysis conducts research and regularly monitors and reports on the financial sector, with a view to assisting in the formulation and implementation of monetary policy. The department is also responsible for questions relating to the overall stability of the financial system, an important aspect of which is the examination of certain clearing and settlement systems that could pose systemic risk. These activities require the collection of information on banks and other financial institutions. The Bank's published monetary and credit aggregates and administered interest rates are calculated from these data.

Departmental economists and analysts examine and analyze issues such as: the link between key macroeconomic variables (such as output and inflation) and the monetary and credit aggregates; the monetary transmission mechanism; the structure of financial markets and the role of regulation and supervision; and the clearing and settlement mechanism, including the payments system.

Organization

Applied Monetary Studies Division examines the impact on macroeconomic variables of interest rates and other financial market prices in Canada. In addition to producing occasional briefing materials on recent financial developments and contributing to the production of the staff's quarterly economic projection, the division pursues an active research agenda in the areas of policy reaction functions and non-linear econometric modelling. Members of the division regularly disseminate their work through publications and presentations at scholarly conferences.

Monetary Policy Analysis Division looks at the macroeconomic implications of changes in money and credit aggregates, including the transmission of monetary policy through financial institutions. Through contacts with the institutions and through econometric research, it ensures that the most relevant definitions are used for narrow and broad money stocks, as well as for business sector and personal sector business credit. The division works closely with the Data Resources Division. Innovations in the financial sector (e.g., the rapid growth in mutual funds and in securitization), impose a constant need to ensure that the concepts being used are up to date. Economists in the division continuously monitor and report on current movements in these aggregates, frequently using various small models to predict output and inflation.

Monetary and Financial Modelling Division is primarily responsible for theoretical research into financial and monetary behaviour and its implications for the formulation and implementation of monetary policy. The group also works on other issues that help the Bank to gain a broader understanding of the impact of monetary policy on the Canadian economy. The division keeps abreast of developments in monetary theory and policy, quantitative and statistical techniques, and maintains contacts with business and academic economists through publications, seminars, and conferences.

Macro-Financial Analysis Division is responsible for research and analysis of developments and trends in the financial system and the dissemination of results to senior Bank management, other federal agencies with financial system responsibilities, and the public. The ultimate objective is to provide insights that inform public policy and private decision making so as to benefit the soundness and efficiency of the financial system. In this context, the division monitors developments affecting financial institutions and markets that may have an impact on the stability and efficiency of the financial system as a whole. The division also researches factors that influence financial behaviour, and the transmission of disturbances in the financial system, that is, macro-financial transmission mechanisms. As well, the division has editorial responsibility for the Bank of Canada's Financial System Review. The division works in close co-operation with staff throughout the Bank, other Canadian government agencies, and international groups and bodies concerned with financial stability.

Infrastructure Development Division is responsible for research and policy advice on issues relating to financial sector infrastructure, that is, the policies that influence behaviours in the financial system. The ultimate objective of the work of the division is to improve the soundness and efficiency of the financial system. To achieve these goals, the division conducts research and provides policy advice to support the Bank's role in the oversight of systemically important payment, clearing and settlement systems. As well, the division researches and contributes to the development of financial sector policy, such as that governing financial institutions and their regulation, often jointly with other agencies. Achieving the goals of the division often involves collaboration with other federal agencies, and with international bodies concerned with financial stability.

Data Resources Division develops and maintains the knowledge, systems, and procedures needed to produce high-quality financial data. The division manages production databases containing monetary and credit aggregates and their components, interest rates, and data on activities in the capital markets. Normal business includes evaluating data quality and communicating with data sources, manipulating data to construct and report on the various aggregates, providing estimations, and evaluating statistical and accounting methods and concepts. The division is also responsible for delivering timely and accurate data to government and international agencies and to the general public.