Following the lead of finance minister, Jim Flaherty, the Bank of Canada issued a statement welcoming initiatives by a group of banks and investors to support the functioning of financial markets in Canada.

The central ank said that it welcomes the initiatives announced today to support the asset-backed commercial paper market in Canada. “The agreement announced this morning by major investors and liquidity providers to pursue an orderly restructuring of the Canadian market for structured finance asset-backed commercial paper (third party ABCP) provides an opportunity for parties to work through the many complex issues related to the market for asset-backed commercial paper,” it said.

“The commitment by institutions to take actions in support of an orderly resolution is very helpful,” the Bank added. “The Bank also welcomes the confirmation by Canada’s major chartered banks that they are supporting their own bank-sponsored asset-backed commercial paper programs. Together, these initiatives should help support the functioning of financial markets in Canada.”

Flaherty made a similar statement at midday, when the S&P/TSX index was down almost 600 points. It closed down 200 points, but well off its lows.

The Bank of Canada has been doing its part to inject liquidity into the money markets in recent days.