The Bank of Canada announced today that it successfully launched its new Standing Term Liquidity Facility (STLF).
“Given 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,” said Governor Stephen S. Poloz.
The STLF is one of several facilities the Bank of Canada has put in place to support liquidity in the financial system. Under the STLF, eligible financial institutions can borrow from the Bank of Canada by pledging a broad set of collateral, including mortgages. This improves their ability to fund new lending.
The Bank of Canada announced plans for the STLF last November as part of its efforts to make Canada’s financial system more resilient and has accelerated its implementation in response to current circumstances.
“Putting the STLF in place at this time means that it can play an important role as part of the Bank of Canada’s actions to help Canadians cope with the effects of the COVID-19 pandemic,” said Senior Deputy Governor Carolyn A. Wilkins. “We know that many Canadian companies and households will need access to credit to bridge this difficult period.”
The Bank of Canada is acting in several ways to support the economy and financial system. The Bank of Canada stands ready to take any and all actions we can to protect the well-being of Canadians during this difficult time.