Additional Temporary Changes to the Bank of Canada’s Standing Liquidity Facility Collateral Policy Regarding the Non-Mortgage Loan Portfolio and Settlement Balances
Under its Standing Liquidity Facility (SLF), the Bank of Canada is prepared to provide liquidity on a daily basis to financial institutions that participate directly in the payments systems operated by Payments Canada. Loans made by the Bank of Canada must be fully collateralized.
To give institutions greater flexibility in managing their collateral, effective immediately, the Bank of Canada will allow Large Value Transfer System (LVTS) participants to temporarily assign 100 per cent of their non-mortgage loan portfolio (NMLP) as pledged collateral for the SLF.
For LVTS participants who do not use their NMLP, effective immediately, these participants will be able to hold up to 100 per cent of their pledged collateral for the SLF in securities that are currently subject to concentration limits.
In addition to this exceptional liquidity initiative, effective March 19, 2020, the Bank of Canada is increasing the target for the minimum daily level of settlement balances to $2 billion, from its current level of $1 billion.
The Bank of Canada continues to closely monitor global market developments and remains committed to providing liquidity as required to support the functioning of the Canadian financial system.
Scott Kinnear
Director
Financial Markets Department
Bank of Canada
613 782-7723
Lorie Zorn
Director
Financial Markets Department
Bank of Canada
403 956-4532
Media Relations
Bank of Canada
613 782-8782