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

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  • Javier Ojea Ferreiro

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.

Suggested Citation

  • Javier Ojea Ferreiro, 2025. "Perceived interconnections between Canadian banks and non-bank financial intermediaries under stress," Staff Analytical Notes 2025-26, Bank of Canada.
    • Handle: RePEc:bca:bocsan:25-26
    DOI: 10.34989/san-2025-26
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    References listed on IDEAS

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    Cited by:

    1. Javier Ojea Ferreiro, 2025. "A Market-Based Approach to Reverse Stress Testing the Financial System," Staff Working Papers 25-32, Bank of Canada.

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    More about this item

    Keywords

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    JEL classification:

    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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