The Bank of Canada (BoC) on Wednesday announced the launch of a new industry committee dedicated to dealing with emerging issues in fixed-income markets.
The new Canadian Fixed-Income Forum (CFIF) aims to “enhance the efficiency and resilience of the Canadian fixed-income market,” the bank says in a statement.
Similar committees exist in the U.S. and Europe, the central bank says, such as the Treasury Market Practices Group sponsored by the Federal Reserve Bank of New York, and the Bond Market Contact Group chaired by the European Central Bank.
The CFIF is co-chaired by two representatives from the central bank — Deputy Governor Lynn Patterson, and Toni Gravelle, chief of financial markets — and it includes a mix of 15 small and large firms that are active in the Canadian fixed-income market, on both the buy side and sell side. The new group was created in response to changes in the market since the financial crisis, to “discuss developments in fixed-income market structure and functioning, market practices, and related policy issues,” the BoC says.
In its inaugural meeting last month, the CFIF focused primarily on issues of market liquidity, noting that most Canadian fixed-income instruments have experienced a reduction in liquidity over the past two years, particularly corporate bonds, the BoC says. Most members were “very concerned” about liquidity under conditions of market stress, the central bank says. There was also some discussion of the impacts of declining liquidity and regulatory changes. The group’s next meeting will be held in January 2016.
The group includes representatives from Addenda Capital, Bank of America Merrill Lynch, BlueCrest Capital Management, British Columbia Investment Management Corp., the Caisse de dépot et placement du Québec, Casgrain & Co. Ltd., Connor, Clark & Lunn Investment Management, Desjardins Securities, Great West Life Assurance Co., Manufacturers Life Insurance Co., National Bank Financial, Ontario Teachers’ Pension Plan, RBC Capital Markets, Scotiabank, and TD Securities.