Bank of Canada Downplays Use of Standing Liquidity Facility

The Bank of Canada has clarified its stance on the use of the Standing Liquidity Facility (SLF), stating that it is a routine tool for financial institutions to manage their liquidity needs, rather than an indication of stress.

Deputy Governor Toni Gravelle emphasized that advances under the SLF are normal and part of daily liquidity management, not an unusual event or signal of financial strain.

The SLF is a high-value payment system operated by the Bank of Canada, offering fully secured intraday and overnight credit to participating institutions. This support enables them to settle payments during the day and at end-of-day operations.