Canada Financial System Survey

Info

History

Chart

Impact:

Medium

Source: Bank of Canada

Next Release:

Date:

Period:

What Does It Measure?

The Canada Financial System Survey measures the overall stability and health of the Canadian financial sector by assessing institutions' risk profiles, liquidity, and systemic vulnerabilities. This national indicator evaluates key areas including credit availability, asset prices, and interbank relations to understand potential risks to financial stability.

Frequency

The survey is conducted semi-annually and the results are typically released in the spring and fall, representing a final figure that reflects comprehensive data collection and analysis.

Why Do Traders Care?

Traders pay close attention to the Canada Financial System Survey as it provides insights into the financial sector’s resilience, which can influence investor confidence, currency values (e.g., CAD), and stock market performance. Positive findings can lead to bullish sentiment in equities and the Canadian dollar, whereas negative assessments may trigger bearish reactions across markets.

What Is It Derived From?

The survey draws its data from a range of financial institutions, including banks, credit unions, and investment firms, utilizing methodologies such as quantitative risk assessments and qualitative responses to survey questions. The findings are aggregated to gauge systemic risks and financial health across various indicators, employing standards set by national regulatory bodies.

Description

The survey serves as a critical tool for policymakers and market participants to assess how various risks—such as credit, liquidity, and operational risks—impact the financial system. Its results are considered leading indicators of economic trends, as they provide foresight into the stability and potential vulnerabilities within the Canadian financial landscape.

Additional Notes

The Canada Financial System Survey is a coincident indicator, reflecting current economic conditions in the financial sector and how they align with broader economic trends. Comparisons to other reports, such as the Bank of Canada’s Financial System Review, enhance the understanding of regional stability and the potential need for regulatory adjustments.

Bullish or Bearish for Currency and Stocks

Higher than expected: Bullish for CAD, Bullish for Stocks. Lower than expected: Bearish for CAD, Bearish for Stocks. A dovish tone signaling lower concerns about financial stability is usually good for the CAD but bad for Stocks due to lower investor confidence in market conditions.

Legend

High Potential Impact
This event has a strong potential to move markets significantly. If the 'Actual' value differs enough from the forecast or if the 'Previous' value is significantly revised, it signals new information that markets may rapidly adjust to.

Medium Potential Impact
This event may cause moderate market movement, especially if the 'Actual' deviates from the forecast or there's a notable revision to the 'Previous' value.

Low Potential Impact
This event is unlikely to affect market pricing unless there's an unexpected surprise or a major revision to prior data.

Surprise - Currency May Strengthen
Actual deviated from Forecast on a medium or high impact event and historically could strengthen the currency.

Surprise - Currency May Weaken
Actual deviated from Forcast on a medium or high impact event and historically could weaken the currency.

Big Surprise - Currency More Likely To Strengthen
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely strengthen the currency.

Big Surprise - Currency More Likely To Weaken
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely weaken the currency

Green Number	Better than forecast for the currency (or previous revise better)
Red Number	Worse than forecast for the currency (or previous revise better)
Hawkish	Supports higher interest rates to fight inflation, strengthening the currency but weighing on stocks.
Dovish	Favors lower rates to boost growth, weakening the currency but lifting stocks.

Date	Time	Actual	Forecast	Previous	Surprise