Perceived interconnections between Canadian banks and non-bank financial intermediaries under stress

Javier Ojea Ferreiro

No 2025-26, Staff Analytical Notes from Bank of Canada

Abstract: I study the links between Canadian banks and non-bank financial intermediaries (NBFIs) by observing co-movements in stock prices. Perceived interconnections increased before the COVID-19 pandemic but have since stabilized, with the strongest ties seen between large banks and NBFIs. The secured credit line extended to Home Trust, a non-bank mortgage lender that experienced severe funding stress in 2017, significantly reduced banks' risk exposure to NBFIs during this episode.

Keywords: Financial stability; Financial institutions; Econometric and statistical methods (search for similar items in EconPapers)
JEL-codes: C58 G01 G21 G23 G32 (search for similar items in EconPapers)
Date: 2025-11
New Economics Papers: this item is included in nep-cfn
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Persistent link: https://EconPapers.repec.org/RePEc:bca:bocsan:25-26

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