Bridging Canadian Business Lending and Market-Based Risk Measures

Guillaume Ouellet Leblanc () and Maxime Leboeuf

No 2019-26, Staff Analytical Notes from Bank of Canada

Abstract: Lending to business is central to economic growth because it supports investment by firms. Knowing how market participants view risk in the financial system can give the Bank of Canada information about future growth in business loans. In this note, we look at three market-based risk measures and find that sudden increases in the perception of risk in the Canadian banking system are associated with a weaker outlook for business loans and real gross domestic product.

Keywords: Business fluctuations and cycles; Financial markets (search for similar items in EconPapers)
JEL-codes: E32 E44 G12 (search for similar items in EconPapers)
Pages: 8 pages
Date: 2019-08
New Economics Papers: this item is included in nep-mac and nep-rmg
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