November 30, 2011
On this page, you can view the chronological list of crisis response measures that the Bank of Canada took between December 12, 2007 and November 30, 2011. Find the actions taken by the Bank during the crisis, how they met monetary policy objectives, and the timeline of the events.
Taking action
From the start of the global credit crisis in August of 2007, the Bank of Canada responded to the challenges facing the Canadian financial system. To promote liquidity in the markets, and to alleviate funding pressures, the Bank of Canada initiated term lending facilities in late 2007. As conditions in funding markets improved, the term liquidity facilities were allowed to expire.
Meeting monetary policy objectives
In response to the global financial crisis and the recession, the Bank of Canada lowered the target interest rate rapidly over the course of 2008 and early 2009 to its lowest possible level, established an operating framework for the implementation of monetary policy at the effective lower bound for the overnight rate and provided exceptional guidance on the future path of rates through its conditional commitment. To help ensure that it continued to hit its inflation target, the Bank also outlined a framework for quantitative and credit easing measures to lower longer-term borrowing rates.
With improvements in the economy, the Bank subsequently removed the conditional commitment, raised the overnight rate and re-established the standard operating framework for the implementation of monetary policy.
Timeline
June 29, 2011
The Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, and the Swiss National Bank today announced an extension of the existing temporary U.S. dollar liquidity swap arrangements through 1 August 2012.
Bank of Canada Announces Extension of Expanded Swap Facility with U.S. Federal Reserve in coordination with other central banks
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Market notices
December 21, 2010
Bank of Canada Announces Extension of Expanded Swap Facility with U.S. Federal Reserve
The Federal Open Market Committee has authorized an extension through 1 August 2011, of its temporary U.S. dollar liquidity swap arrangements with the Bank of Canada, the Bank of England, the European Central Bank, the Bank of Japan, and the Swiss National Bank. The swap arrangements, established in May 2010, had been authorized through January 2011.
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Market notices
June 1, 2010
Bank of Canada increases overnight rate target to 1/2 per cent and re-establishes normal functioning of the overnight market
The Bank of Canada today announced that it is raising its target for the overnight rate by one-quarter of one percentage point to 1/2 per cent.
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Press releases
June 1, 2010
Re-Establishment of the Standard Operating Framework for the Implementation of Monetary Policy
As part of the Bank of Canada's interest rate decision on 1 June 2010, the Bank will re-establish the standard operating framework for the implementation of monetary policy.
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Press releases
May 9, 2010
In response to the re-emergence of strains in U.S. dollar short-term funding markets in Europe, the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, and the Swiss National Bank are announcing the re-establishment of temporary U.S. dollar liquidity swap facilities.
Bank of Canada Announces Swap Facility with U.S. Federal Reserve as part of Coordinated Central Bank Actions
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Market notices
April 20, 2010
In accordance with today's policy rate announcement, no further Term PRA operations are scheduled. The last operation was conducted on 12 April 2010.
Bank of Canada Announces Updated Substitution Schedule for Outstanding Bank of Canada Term PRA Operations
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April 20, 2010
Bank of Canada maintains overnight rate target at 1/4 per cent; removes conditional commitment
The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1/4 per cent.
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Press releases
January 27, 2010
In coordination with other central banks, the Bank of Canada confirms the expiration of its US $30 billion swap facility with the Federal Reserve on 1 February 2010. This facility, which was established to counter pressures in global funding markets, is no longer needed, given the improvements in financial market functioning seen over the past year.
Bank of Canada Confirms Expiration of Temporary Swap Facility with U.S. Federal Reserve
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Market notices
December 15, 2009
Given improved conditions in Canadian funding markets, the Bank of Canada is announcing that effective 19 January 2010 the following changes will apply to the Term PRA facility.
Changes to the Terms of the Bank of Canada's Term Purchase and Resale Agreement (PRA) Facility
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Market notices
November 5, 2009
Given improved conditions in funding markets, the Bank of Canada is announcing that, starting 2 February 2010, its temporary measure of allowing Large Value Transfer System (LVTS) participants to assign their non-mortgage loan portfolios as eligible collateral for LVTS and Standing Liquidity Facility (SLF) purposes will be gradually reduced from 100 per cent to 20 per cent of each participant's total pledged collateral.
Changes to Policy Regarding the Non-Mortgage Loan Portfolio as Collateral for the Bank of Canada's Standing Liquidity Facility (SLF)
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Market notices
September 22, 2009
Reflecting the improved conditions in funding markets, as evidenced by lower market-based funding costs and the lack of coverage in recent auctions for temporary liquidity facilities, the Bank of Canada is announcing that the following facilities will expire at the end of October 2009.
Reflecting the continued improvement in market conditions, the Bank of Canada announces changes to its Temporary Liquidity Facilities
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Market notices
June 25, 2009
The temporary reciprocal currency arrangements (swap lines) between the U.S. Federal Reserve and other central banks have been extended to 1 February 2010.
Bank of Canada Announces Extension of Expanded Swap Facility with U.S. Federal Reserve
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Market notices
June 25, 2009
The Bank of Canada is announcing extensions to its temporary liquidity facilities.
Bank of Canada Announces Extension of Temporary Liquidity Facilities
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Market notices
April 21, 2009
The Bank is setting an effective lower bound (ELB) of 25 basis points on the overnight interest rate in order to preserve the effective functioning of markets in a low interest rate environment.
Operating Framework for the Implementation of Monetary Policy at the Effective Lower Bound for the Overnight Interest Rate
April 21, 2009
Bank of Canada lowers overnight rate target by 1/4 percentage point to 1/4 per cent and, conditional on the inflation outlook, commits to hold current policy rate until the end of the second quarter of 2010
The Bank of Canada today announced that it is lowering its target for the overnight rate by one-quarter of a percentage point to 1/4 per cent, which the Bank judges to be the effective lower bound for that rate.
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Press releases
February 23, 2009
As part of its provision of liquidity to support the efficient functioning of the market for private-sector securities.
Bank of Canada Announces New Term PRA Facility for Private Sector Instruments
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Market notices
February 3, 2009
To address continued pressures in global U.S. dollar funding markets, the temporary reciprocal currency arrangements (swap lines) between the Federal Reserve and other central banks have been extended to 30 October 2009.
Bank of Canada Announces Extension of Expanded Swap Facility with U.S. Federal Reserve
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Market notices
November 12, 2008
Consistent with its commitments under the G7 Plan of Action, the Bank of Canada announced on 14 October measures to provide exceptional liquidity to the Canadian financial system. Further to these measures, the Bank today announced plans for a Canadian Dollar Term Loan Facility (TLF).
Bank of Canada Introduces Further Measure to Provide Liquidity to the Canadian Financial System
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Market notices
October 14, 2008
The Bank of Canada strongly welcomes the decisive actions announced today by the U.S. authorities. These significant and timely measures are part of the implementation of the G7 Action Plan agreed last Friday.
As Part of the G7 Action Plan, Bank of Canada Introduces New Measures to Provide Liquidity to the Canadian Financial System
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September 29, 2008
In response to continued strains in short-term funding markets, central banks today are announcing further coordinated actions to expand significantly the capacity to provide U.S. dollar liquidity.
Bank of Canada Announces Expansion of the Swap Facility with U.S. Federal Reserve as part of Coordinated Central Bank Actions
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Market notices
September 18, 2008
Today, the Bank of Canada, the Bank of England, the European Central Bank (ECB), the Federal Reserve, the Bank of Japan and the Swiss National Bank are announcing coordinated measures designed to address the continued elevated pressures in U.S. dollar short-term funding markets.
Bank of Canada Announces Swap Facility with U.S. Federal Reserve as part of Coordinated Central Bank Actions
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Market notices
June 25, 2008
Further to its 12 December 2007 announcement, the Bank of Canada is expanding the list of securities eligible to be pledged as collateral for the Standing Liquidity Facility to include marketable securities issued by the United States Treasury (bills, notes and bonds, including Treasury Inflation-Protected Securities).
United States Treasury Securities Accepted as Collateral for the Bank of Canada's Standing Liquidity Facility
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Market notices
March 11, 2008
Since the co-ordinated actions taken in December 2007, the G10 central banks have continued to work together closely and to consult regularly on liquidity pressures in funding markets. Pressures in some of these markets have recently increased again.
Bank of Canada Announces New Term PRA Transactions as part of Co-ordinated G10 Central Bank Actions
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Market notices
December 12, 2007
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 the Canadian Payments Association. Loans made by the Bank of Canada must be fully collateralized.
Expansion of List of Securities Eligible as Collateral for Use Under Bank of Canada Standing Liquidity Facility
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Market notices
December 12, 2007
Today, the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, and the Swiss National Bank are announcing measures designed to address elevated pressures in short-term funding markets.
Bank of Canada Temporarily Expands List of Securities Eligible for Term PRA Transactions
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Market notices