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Bank of Canada Announces New Term PRA Transactions as part of Co-ordinated G10 Central Bank Actions

Since the co-ordinated actions taken in December 2007, the G10 central banks have continued to work together closely and to consult regularly on liquidity pressures in funding markets. Pressures in some of these markets have recently increased again. We all continue to work together and will take appropriate steps to address those liquidity pressures.

To that end, today the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, and the Swiss National Bank are announcing specific measures.

Bank of Canada Action

As part of its continuing provision of liquidity in support of the efficient functioning of financial markets, the Bank of Canada announced today that it will enter into 28-day term purchase and resale agreements as follows:

Amount Transaction and Settlement Maturity
$2 billion 20 March 2008 17 April 2008
$2 billion 3 April 2008 1 May 2008

The list of eligible securities for these transactions is comprised of the following:

  • Securities issued by the Government of Canada
  • Securities guaranteed by the Government of Canada (this category includes Canada Mortgage Bonds and NHA mortgage-backed securities with a minimum pool size of $75 million)
  • Securities issued or guaranteed by a provincial government
  • Bankers' acceptances and bearer deposit notes, having a remaining term to maturity not exceeding one hundred and eighty days

Securities used in the term PRA transactions will be subject to the same margin requirements as those applicable in SLF transactions.

The total amount of assets acquired on any day through term PRA operations will be announced on the Bank's web site by 4:45 p.m. (ET). The assets will also be reported on the Bank of Canada's balance sheet.

The case for further operations will be reviewed in light of conditions in financial markets.

Information on Related Actions Being Taken by Other Central Banks

Information on the actions that will be taken by other central banks is available at the following websites.

Bank of England
European Central Bank
Federal Reserve System
Swiss National Bank

Related Statements by Other Central Banks

Bank of Japan
Swedish Riksbank

For further information, please contact:
Jeremy Harrison
(613) 782-8782

Content Type(s): Press, Market notices