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November 3, 2009

An analysis of recent financial events through the lens of the Canadian System of National Accounts − Financial and Wealth Accounts. Allan Tomas, Chief, Financial and Wealth Accounts. November 3, 2009. The setting.

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November 3, 2009

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  1. An analysis of recent financial events through the lens of the Canadian System of National Accounts − Financial and Wealth Accounts Allan Tomas, Chief, Financial and Wealth Accounts November 3, 2009

  2. The setting Fundamental shifts in saving behaviour and net lending positions among sectors in the Canadian economy Statistics Canada • Statistique Canada

  3. The setting Shift in total debt from governments and corporations to the household sector Statistics Canada • Statistique Canada

  4. The setting Economy increasingly wealth-driven, with growth in the value of assets, specifically in the household sector Statistics Canada • Statistique Canada

  5. The setting Securitization market for mortgages on the rise in Canada Statistics Canada • Statistique Canada

  6. The setting Mortgage market more conservative in Canada Statistics Canada • Statistique Canada

  7. Risk factors Household sector exposed to increasing interest rates given current debt levels Statistics Canada • Statistique Canada

  8. Risk factors Household sector portfolio takes on more risk Statistics Canada • Statistique Canada

  9. Risk factors Increased international integration of financial markets - Canadians' exposure increased - Foreign Property Rule Statistics Canada • Statistique Canada

  10. Recent financial events IMPACT: Canadian institutional investors reduce foreign short-term debt in rapid response to global credit concerns (August 2007); foreign bonds follow suit in subsequent quarters Statistics Canada • Statistique Canada

  11. Recent financial events IMPACT: Immediate, marked and sustained change in Canadian institutional investors’ foreign portfolio investment at the outset of credit concerns Statistics Canada • Statistique Canada

  12. Recent financial events IMPACT: The cross-border repurchase agreements market also grinds to a halt in 2007 Statistics Canada • Statistique Canada

  13. Recent financial events IMPACT: In Canada, the asset-backed securities short-term paper market shuts down beginning mid-2007 Statistics Canada • Statistique Canada

  14. Reaction The policy reaction: liquidity injection Financial Inst Fed GOV’T +56 T-bills +22 deposits, -50 mortg +32 repos +24 claims +46 T-bills +26 bonds Bank of Canada +32 repos +22 deposits -10 T-bills ABS CMHC +50 mortg +24 bonds +24 claims +50 bonds Statistics Canada • Statistique Canada

  15. Reaction Reaction: T-Bills are mostly purchased by chartered banks Statistics Canada • Statistique Canada

  16. Reaction Reaction: Substantial new short-term borrowing by the federal government in 08q4; initially, no change in government net debt Statistics Canada • Statistique Canada

  17. Reaction Reaction: Credit crunch in Canada?...evidence for non-financial corporations…supply or demand? Statistics Canada • Statistique Canada

  18. Results Canadian economy slows from 2007 and then contracts Statistics Canada • Statistique Canada

  19. Results Canadian investors repatriated funds from international markets for the first time in 30 years Statistics Canada • Statistique Canada

  20. Results Canada and US stock markets slide Statistics Canada • Statistique Canada

  21. Results Household sector capital losses: Canada and United States Statistics Canada • Statistique Canada

  22. Point of Access – www.statcan.gc.ca • The Daily • CANSIM • National Economic Accounts Module on: www.statcan.gc.ca • NBSA, FFA and BOP workshops • Consultation with Statistics Canada analysts • iead-info-dcrd@statcan.gc.ca • infobalance@statcan.gc.ca • Ad-hoc analysis and data requests • Canadian Economic Accounts Quarterly Review (CEAQR) Statistics Canada • Statistique Canada

  23. Release Dates – Financial Flow Accounts Financial flow accounts 13-014-x and 13-010-x Financial Flow data are available approximately 60 days after the reference period. Statistics Canada • Statistique Canada

  24. 2009 Release Dates – National Balance Sheet Accounts National balance sheet accounts 13-214-x and 13-010-x National Balance Sheet Account data are available approximately 75 days after the reference period. Statistics Canada • Statistique Canada

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