Shadow banking is growing – and it’s a hidden risk to the stability of the financial system

Shadow banking is playing an increasing role in the financial system. Private equity firms, investment funds and mortgage finance companies all employ alternative lending strategies that are lightly regulated, and Canada’s Office of the Superintendent of Financial Institutions is concerned about how much exposure Canada’s banks have to this type of lender, who are collectively known as non-bank financial intermediaries.

Published: 7 Jun 2023

Interaction with major crypto-asset platforms could benefit both CBDCs and cryptocurrencies

Cryptocurrencies are an unregulated, ethically dubious financial instrument used by criminal organizations, terrorists and war criminals, writes Andy Holloway in the FP Investor Newsletter. But central bank digital currencies (CBDC) are the right side of regulation.

Published: 25 May 2023

Delve: Cashing in or Losing Big on Cryptocurrency Yield Farms?

If something seems too good to be true, it probably is. Add cryptocurrency yield farms to that list. A complex investment strategy in decentralized finance markets, yield farming advertises eye-popping passively earned returns. While some investors boast impressive returns, for others the risks are unclear or even undisclosed before they invest, and the advertised returns never materialize.

Published: 17 May 2023

Profs Beaumont, Schumacher and Weitzner awarded SSHRC Insight Development Grant

Congratulations to Paul Beaumont, David Schumacher and Gregory Weitzner, who were awarded a 2022-2023 SSHRC Insight Development Grant

“Call Me Maybe: Institutional Ownership and Corporate Call Policy”

Published: 14 Apr 2023

Liquidity support for mid-sized US banks is a band-aid solution that masks underlying issues

In a five-day period in early March 2023, three mid-sized US banks collapsed: Silicon Valley Bank, Signature Bank, and Silvergate Bank. The United States Federal Reserve stepped in with an emergency lending program to support liquidity and mitigate the risk of contagion. While that will probably work in the short term, it doesn’t solve the problem, says Mo Chaudhury, an Associate Professor of Finance (Teaching) at Desautels.

Published: 14 Apr 2023

Recap of DGFRC-sponsored finance workshop

The 10th HEC-McGill Winter Finance Workshop took place from March 26-28, 2023, in Ischgl, Austria, in collaboration with the Faculty of Law, Economics and Finance (FDEF) at the University of Luxembourg.

Published: 12 Apr 2023

The future of commercial real estate belongs to those who can meet the evolving needs of the office

Lockdowns and remote work presented unique challenges for the commercial real estate sector. Vast amounts of office space were suddenly empty as people worked from home. But the sector is rebounding. There are projects underway in cities around the world are a testament to investors’ confidence in its outlook, says Sebastien Betermier, an Associate Professor of Finance at Desautels.

Published: 23 Mar 2023

McGill Personal Financial Essentials course helps people understand common investing mistakes

Human instinct is not well-suited to making wise investments, says Prof. Benjamin Croitoru in an interview with Global News. Fear of missing out is just one example of this. Following the crowd can lead to bad investments, and the crash of cryptocurrency values in 2022 is only the latest example of this.

Published: 6 Jan 2023

Prof. Augustin's paper wins 2022 Global AI Finance Research Conference Best Paper Award

Congratulations to Patrick Augustin, Associate Professor in Finance, whose paper with co-authors Roy Chen-Zhang and Donghwa Shin (both with the University of North Carolina at Chapel Hill) titled “Reaching for Yield in Decentralized Financial Markets” has been awarded the 2022 Global AI Finance Research Conference Best Paper Award.

Published: 6 Jan 2023

Delve: How Banks and Institutional Investment Funds Are Driving the Road to Net-Zero

One of the biggest challenges today for financial institutions is how to meet net-zero climate targets while achieving high returns on investment and satisfying the needs of various stakeholders. What does the road to net-zero look like in the realm of long-term investment, who are the players, and how should the inevitable roadblocks be overcome?

Published: 5 Jan 2023

Central bank digital currencies could help improve financial inclusion

People are using cash less, and plastic more. But this presents a problem for unbanked and underbanked people. There are still a significant number of Canadians who don’t have a bank account. They can’t participate fully in the digital economy, but central bank digital currencies could help them do that.

Published: 21 Dec 2022

Crypto’s impressive returns led institutional investors to consider unconventional investments

Cryptocurrencies have always been volatile, but they have also generated some very impressive returns. Even large pension funds got in on the action, and some of them have been burned. By investing in the crypto exchange FTX, the Ontario Teachers’ Pension Plan (OTPP) hoped to avoid the risk of investing in individual cryptocurrencies. But that backfired spectacularly when FTX collapsed, and OTPP recently wrote down its entire $95 million (USD) investment.

Published: 2 Dec 2022

A place to call home trumps portfolio diversification for some investors

Many households are heavily, or even exclusively, invested in real estate. That’s a lot of money to have tied up in a single type of investment, but people don’t think of houses like other investments, according to research from Associate Professor Sebastien Betermier.

Published: 14 Nov 2022

Prof. Weitzner's paper wins research award

Congratulations to Gregory Weitzner, Assistant Professor in Finance, whose paper “Bank Loan Markups and Adverse Selection” has won the 2022 John W. Ryan Research Award.

Published: 14 Nov 2022

Delve: Why digital currencies could change the future of central banking

Central Bank Digital Currencies (CBDC) represent a possible next step in the technological evolution of banking and the financial intermediation sector, with advances in privacy, fraud protection, and efficiency—but their roles and risks on the high-tech path forward are only now becoming clear.

Published: 8 Nov 2022


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