), Macroeconomic policies in the world economy, Springer. ECB (2005), “Asset price bubbles and monetary policy”, Monthly Bulletin, April, pp. 47-60. Faia, E. (2008), “Optimal Monetary Policy with Credit Augmented Liquidity Cycles”, mimeo, Goethe University Frankfurt. Faia, E. and T. Monacelli (2007), “Optimal Interest Rate Rules, Asset Prices and Credit Frictions”, Journal of Economic Dynamics and Control, Vol. 31-10, pp. 3228-3254.
9  In the 2015 federal budget, the government announced that it plans to adopt measures to ensure that “systemically important banks’ shareholders and creditors are responsible for bearing losses, thereby giving them stronger incentives to monitor banks’ risk-taking activities.” One of the measures “would allow for the permanent conversion of eligible liabilities of a non-viable bank into common shares.” See www.budget.gc.ca/2015/docs/plan/toc-tdm-eng.html.