The world’s major central banks, including the Bank of Canada, are extending their existing liquidity swap arrangements into 2014.
These swap arrangements had been due to expire on Feb. 1, 2013; but they have now been extended for another year. But now, the banks are extending both their U.S. dollar liquidity swap arrangements, and the network of temporary bilateral liquidity swap arrangements until Feb. 1, 2014. These bilateral arrangements enable the provision of liquidity in each jurisdiction in any of their currencies.
Specifically, the Bank of Canada and the U.S. Federal Reserve have agreed to extend the US$30 billion swap facility that was set to expire in 2013. And, the Bank has also agreed to extend its series of temporary bilateral liquidity swap arrangements with the Bank of England, the European Central Bank, and the Swiss National Bank.
The BoC says that it “continues to judge that it is not necessary for it to draw or offer operations on any of these swap facilities at this time, but that it is prudent to maintain these agreements in place.”
It also says that it “continues to monitor developments in global financial markets closely and remains committed to providing liquidity as required to support the stability of the Canadian financial system and the functioning of financial markets.”