Bank of Canada Eases Concerns Over Liquidity Facility Use
The Bank of Canada has issued a joint statement with the Office of the Superintendent of Financial Institutions (OSFI) urging financial institutions to use its Standing Liquidity Facility without stigma.
The facility, which operates as a high-value payment system managed by the central bank, provides fully secured intraday and overnight credit to participating institutions. Deputy Governor Toni Gravelle views the institutional use of the SLF for overnight liquidity as standard liquidity management practice rather than an emergency measure.
The Bank of Canada is working to update its repo clearing infrastructure, with plans to implement a new tri-party platform designed to support the development of the term repo market and draw in new participants including large corporate treasuries.