New Bank of Canada Measures to Support Key Funding Markets
The Bank of Canada is committed to supporting the efficient and continuous functioning of financial markets during the current period of uncertainty in which conditions are evolving rapidly.
To that end, the Bank is announcing that it will broaden eligible collateral for its term repo facility to include the full range of collateral eligible under the Standing Liquidity Facility, with the exception of the non-mortgage loan portfolio. Further operational details, including the effective date, will follow. See the full list of SLF collateral. This expansion of eligible collateral will provide support to funding conditions for financial institutions by providing a backstop to regular private funding.
The Bank is also announcing that it stands ready, as a proactive measure, to provide support to the Canada Mortgage Bond (CMB) market so that this important funding market continues to function well. This would include, as required, purchases of CMBs in the secondary market. This is similar in spirit to the increase in Government of Canada bond buybacks that was announced last week to support market liquidity and price discovery. Further operational details, including the effective date, will follow.
The Bank has also taken other steps to ensure that the Canadian financial system has sufficient liquidity. These additional measures have been announced in separate notices on the Bank’s website.
The Bank of Canada is taking concerted action to support the Canadian economy during this period of economic stress. Our measures will help ensure that financial institutions can continue to extend credit to both households and businesses.
The Bank continues to closely monitor global market developments and remains committed to providing liquidity as required to support the functioning of the Canadian financial system.
Contacts for market participants:
Mark de Guzman
Director, Financial Markets Department, Bank of Canada
613 782-7245
Scott Kinnear
Director, Financial Markets Department, Bank of Canada
613 782-7723
Contact for media:
Media Relations
Bank of Canada
613 782-8782