This is my favorite paper. We propose to redesign the government’s debt program to better harvest liquidity premia, such as via bond buybacks, zero-coupon issuance, and perpetuities. The paper presents four blue-sky ideas for lowering the cost of the Government of Canada’s debt without increasing the debt’s risk profile.
Government of Canada bonds, bills, and real‑return bonds form a tightly interconnected ecology: they fund the federal government, anchor Canadian yield curves and pricing, and sit at the core of trading, collateral, and risk management across the financial system.
NYSE’s Retail Liquidity Program segmented its retail flow from the main venue. This is a theoretical worry but, for NYSE, a modest win. The program separated retail trades into a special dark segment makes prices easier to read and trading slightly cheaper for everyone.
The Canadian repo market is presented as an ecosystem, in which banks and buy‑side institutions are linked through collateralized funding on the rails of clearing, settlement, and central banking infrastructure. This guide is old but is apparently still used to train new employees at the dealers. Hmm, the Bank of Canada really should issue an update…