All Big Six banks have tapped the new liquidity facility established by the Bank of Canada to ensure that lending can still take place despite the economic turmoil created by the Covid-19 outbreak.<\/p>\n
According to the Canadian Bankers Association (CBA), nine banks \u2014 including the Big Six,\u00a0Canadian Western Bank, Equitable Bank and HSBC Bank Canada \u2014 have all used the central bank’s new standing term liquidity facility (STLF).<\/p>\n
The STLF enables banks to borrow from the central bank by pledging a broad set of collateral, including mortgages.<\/p>\n
Historically, banks have sometimes been reluctant to utilize extraordinary funding arrangements for fear of signalling to the market that they may be in financial distress.<\/p>\n
In this case, the Bank of Canada has called on banks to access the STLF.<\/p>\n
\u201cGiven the current challenges in funding markets, the Bank of Canada encourages Canadian financial institutions to use the STLF to support the liquidity needs of their clients,\u201d said Stephen Poloz, governor of the central bank.<\/p>\n
The Bank of Canada announced plans for the STLF last year, but accelerated its development in response to the pandemic.<\/p>\n
\u201cPutting the STLF in place at this time means that it can play an important role as part of the Bank of Canada\u2019s actions to help Canadians cope with the effects of the Covid-19 pandemic,\u201d said Carolyn Wilkins, senior deputy governor of the bank.<\/p>\n
\u201cWe know that many Canadian companies and households will need access to credit to bridge this difficult period,\u201d she added.<\/p>\n
In a statement, the CBA said: “By borrowing from the STLF, banks of all sizes are taking responsible action to support collaborative efforts across the industry and with government and regulatory authorities to enhance the resilience of Canada’s strong financial system in the context of the Covid-19 outbreak.”<\/p>\n","protected":false},"excerpt":{"rendered":"
Nine banks accessing BoC’s new liquidity option, CBA says<\/p>\n","protected":false},"author":147314,"featured_media":397079,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[2318,2312],"tags":[3435,2361,57731],"yst_prominent_words":[1384,57656,57653,55641,52110,52109,29385,22381,18249,16404,14167,10193,6855,6351,6214,6014,5146,4154,2116,6],"acf":[],"_links":{"self":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/397897"}],"collection":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/users\/147314"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/comments?post=397897"}],"version-history":[{"count":4,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/397897\/revisions"}],"predecessor-version":[{"id":397914,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/397897\/revisions\/397914"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media\/397079"}],"wp:attachment":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media?parent=397897"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/categories?post=397897"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/tags?post=397897"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/yst_prominent_words?post=397897"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}