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

05/12/2015 Statistics Canada Statistique Canada 2 Fundamental shifts in saving behaviour and net lending positions among sectors in the Canadian economy The setting

05/12/2015 Statistics Canada Statistique Canada 3 Shift in total debt from governments and corporations to the household sector The setting

05/12/2015 Statistics Canada Statistique Canada 4 Economy increasingly wealth-driven, with growth in the value of assets, specifically in the household sector The setting

05/12/2015 Statistics Canada Statistique Canada 5 Securitization market for mortgages on the rise in Canada The setting

05/12/2015 Statistics Canada Statistique Canada 6 Mortgage market more conservative in Canada The setting

05/12/2015 Statistics Canada Statistique Canada 7 Household sector exposed to increasing interest rates given current debt levels Risk factors

05/12/2015 Statistics Canada Statistique Canada 8 Household sector portfolio takes on more risk Risk factors

05/12/2015 Statistics Canada Statistique Canada 9 Increased international integration of financial markets - Canadians' exposure increased - Foreign Property Rule Risk factors

05/12/2015 Statistics Canada Statistique Canada 10 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 Recent financial events

05/12/2015 Statistics Canada Statistique Canada 11 IMPACT: Immediate, marked and sustained change in Canadian institutional investors’ foreign portfolio investment at the outset of credit concerns Recent financial events

05/12/2015 Statistics Canada Statistique Canada 12 IMPACT: The cross-border repurchase agreements market also grinds to a halt in 2007 Recent financial events

05/12/2015 Statistics Canada Statistique Canada 13 IMPACT: In Canada, the asset-backed securities short-term paper market shuts down beginning mid-2007 Recent financial events

05/12/2015 Statistics Canada Statistique Canada 14 The policy reaction: liquidity injection Financial Inst +56 T- bills -50 mortg+32 repos Fed GOV’T +22 deposits, +46 T-bills Bank of Canada +32 repos+22 deposits ABSCMHC +50 mortg +50 bonds +24 bonds +24 claims +26 bonds Reaction +24 claims -10 T-bills

05/12/2015 Statistics Canada Statistique Canada 15 Reaction: T-Bills are mostly purchased by chartered banks Reaction

05/12/2015 Statistics Canada Statistique Canada 16 Reaction: Substantial new short-term borrowing by the federal government in 08q4; initially, no change in government net debt Reaction

05/12/2015 Statistics Canada Statistique Canada 17 Reaction: Credit crunch in Canada?...evidence for non-financial corporations…supply or demand? Reaction

05/12/2015 Statistics Canada Statistique Canada 18 Canadian economy slows from 2007 and then contracts Results

05/12/2015 Statistics Canada Statistique Canada 19 Canadian investors repatriated funds from international markets for the first time in 30 years Results

05/12/2015 Statistics Canada Statistique Canada 20 Canada and US stock markets slide Results

05/12/2015 Statistics Canada Statistique Canada 21 Household sector capital losses: Canada and United States Results

05/12/2015 Statistics Canada Statistique Canada 22 Point of Access –  The Daily  CANSIM  National Economic Accounts Module on:  NBSA, FFA and BOP workshops  Consultation with Statistics Canada analysts  iead-info- iead-info-   Ad-hoc analysis and data requests  Canadian Economic Accounts Quarterly Review (CEAQR)

05/12/2015 Statistics Canada Statistique Canada 23 Release Dates – Financial Flow Accounts Financial Flow data are available approximately 60 days after the reference period. Release date Reference period 01-Dec-09 First quarter 2009 – Third quarter Mar-10 First quarter 2009 – Fourth quarter Jun-10 First quarter 2006 – First quarter Sep-10 First quarter 2010 – Second quarter Dec-10 First quarter 2010 – Third quarter Mar-11 First quarter 2010 – Fourth quarter 2010 Financial flow accounts x and x

05/12/2015 Statistics Canada Statistique Canada Release Dates – National Balance Sheet Accounts National Balance Sheet Account data are available approximately 75 days after the reference period. Release date Reference period 14-Dec-09 First quarter 2009 – Third quarter Mar-10 First quarter 2009 – Fourth quarter Jun-10 First quarter 2006 – First quarter Sep-10 First quarter 2010 – Second quarter Dec-10 First quarter 2010 – Third quarter Mar-11 First quarter 2010 – Fourth quarter 2010 National balance sheet accounts x and x