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The Efficiency of Canadian Capital Markets: Some Bank of Canada Research


  • Scott Hendry

    (Bank of Canada)

  • Michael R. King

    (Bank of Canada)


Capital markets and their related financial instruments make an important contribution to the welfare of Canadians. The Bank of Canada is interested in the efficient functioning of capital markets through each of its responsibilities for monetary policy, the financial system, and funds management. Hendry and King highlight the key findings of Bank research published over the past year that addresses capital market efficiency and summarize lessons that have been learned. The research conducted thus far suggests that Canadian capital markets are efficient for a capital market of Canada's size but are less diverse than the U.S. capital markets, indicating that there is room for improvement in certain areas.

Suggested Citation

  • Scott Hendry & Michael R. King, 2004. "The Efficiency of Canadian Capital Markets: Some Bank of Canada Research," Finance 0409010, EconWPA.
  • Handle: RePEc:wpa:wuwpfi:0409010
    Note: Type of Document - pdf; pages: 14. Published in Bank of Canada Review 2004 (Summer):5-17.

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    References listed on IDEAS

    1. Bhattacharya, Anand K & Gallinger, George W, 1991. "Causality Tests of Short Sales on the New York Stock Exchange," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 14(3), pages 277-286, Fall.
    2. Said Elfakhani, 2000. "Short positions, size effect, and the liquidity hypothesis: implications for stock performance," Applied Financial Economics, Taylor & Francis Journals, vol. 10(1), pages 105-116.
    3. Diamond, Douglas W. & Verrecchia, Robert E., 1987. "Constraints on short-selling and asset price adjustment to private information," Journal of Financial Economics, Elsevier, vol. 18(2), pages 277-311, June.
    4. Figlewski, Stephen & Webb, Gwendolyn P, 1993. " Options, Short Sales, and Market Completeness," Journal of Finance, American Finance Association, vol. 48(2), pages 761-777, June.
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    More about this item


    capital market efficiency; Canada; bond; equity; foreign exchange; derivatives; securitization.;

    JEL classification:

    • F3 - International Economics - - International Finance

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