Bank of Canada Seeks to Normalize Use of Standing Liquidity Facility

The Bank of Canada has urged banks to use its Standing Liquidity Facility (SLF) without fear of stigma, emphasizing that such use is a routine operation rather than an emergency measure.

In a joint statement with the Office of the Superintendent of Financial Institutions, the central bank clarified that SLF advances should be viewed as standard liquidity management practice.

Deputy Governor Toni Gravelle stated at a Bloomberg conference in New York that the bank views institutional use of the SLF for overnight liquidity as a normal part of financial operations.

The SLF is a high-value payment system managed by the Bank of Canada, providing fully secured intraday and overnight credit to participating institutions.