The Bank of Canada (Bank) and the Office of the Superintendent of Financial Institutions (OSFI) are issuing this joint statement to provide clarity on the purpose and use of the Standing Liquidity Facility (SLF).
The SLF is a key tool in the Bank’s operational framework for monetary policy implementation. It supports the Bank’s objectives by helping reinforce the policy interest rate and supports the effective functioning of Canada’s high-value payment system, Lynx. This facility gives Lynx participants access to secured liquidity, both intraday and overnight, as part of their routine liquidity management. If at the end of the business day a participant is short cash—such as due to unexpected payments or liquidity flows—it will automatically receive an overnight SLF advance. Overnight SLF advances are non-discretionary in Lynx and are a normal part of a participant’s daily payment system activity, not a sign of liquidity stress.
The Bank and OSFI consider SLF use by Lynx participants to be consistent with routine liquidity management activities. Participants can use the facility as needed.1 Overnight SLF draws by participants are not considered exceptional liquidity measures by OSFI or the Bank. The Bank and OSFI will continue to engage with Lynx participants to support a clear understanding of the SLF’s role as part of their day-to-day liquidity management practices.
Further details on the SLF can be found on the Bank’s website and in the Staff Analytical Paper, “Everything you wanted to know about the Bank’s SLF.” In addition, further details on the Bank’s monetary policy implementation are outlined in Deputy Governor Gravelle’s September 29, 2026, remarks, “Repo markets and monetary policy implementation.”
For further information, please contact:
Bank of Canada
Market-Ops-Inquiry@bank-banque-canada.ca
Office of the Superintendent of Financial Institutions
Information@osfi-bsif.gc.ca