Bank of Canada Announces Extension of Swap Facilities in coordination with other central banks

The Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing an extension of the existing temporary U.S. dollar liquidity swap arrangements to 1 February 2014.  Previously, these swap arrangements had been authorized to 1 February 2013.

These central banks are also extending to 1 February 2014 the network of temporary bilateral liquidity swap arrangements that enable the provision of liquidity in each jurisdiction in any of their currencies should market conditions so warrant.  The bilateral liquidity swap arrangements had been authorized to 1 February 2013.

The Bank of Japan will consider an extension of both sets of swap arrangements at its next Monetary Policy Meeting.

Bank of Canada Action

The Bank of Canada and the U.S. Federal Reserve have agreed to extend the US $30 billion swap facility (reciprocal currency arrangement) to 1 February 2014. This swap facility was set to expire on 1 February 2013.

The Bank has also agreed to extend, to 1 February 2014, the network of temporary bilateral liquidity swap arrangements it has with the Bank of England, the European Central Bank, and the Swiss National Bank. These arrangements, originally authorized through 1 February 2013, enable the Bank of Canada to provide Canadian dollars to the other central banks and to provide liquidity in euros, U.K. pounds sterling, Swiss francs and U.S. dollars to financial institutions in Canada, should the need arise.

The Bank of Canada continues to judge that it is not necessary for it to draw or offer operations on any of these swap facilities at this time, but that it is prudent to maintain these agreements in place. Should these facilities be drawn on, the details of the liquidity facilities provided would depend on the specific market circumstances at the time.

The Bank of Canada continues to monitor developments in global financial markets closely and remains committed to providing liquidity as required to support the stability of the Canadian financial system and the functioning of financial markets.

Information on related actions being taken by other central banks

Information on the actions taken by other central banks is available at the following websites.

U.S. Federal Reserve Board
Bank of England
European Central Bank
Bank of Japan
Swiss National Bank

For further information, please contact:
Jeremy Harrison
613 782-8782