A Chronology of Crisis Response Measures

On this page you can find the actions taken by the Bank during the crisis, how they met monetary policy objectives, and the timeline of the events.

Taking Action

From the start of the global credit crisis in August of 2007, the Bank of Canada responded to the challenges facing the Canadian financial system. To promote liquidity in the markets, and to alleviate funding pressures, the Bank of Canada initiated term lending facilities in late 2007. As conditions in funding markets improved, the term liquidity facilities were allowed to expire.

Meeting Monetary Policy Objectives

In response to the global financial crisis and the recession, the Bank of Canada lowered the target interest rate rapidly over the course of 2008 and early 2009 to its lowest possible level, established an operating framework for the implementation of monetary policy at the effective lower bound for the overnight rate and provided exceptional guidance on the future path of rates through its conditional commitment. To help ensure that it continued to hit its inflation target, the Bank also outlined a framework for quantitative and credit easing measures to lower longer-term borrowing rates.

With improvements in the economy, the Bank subsequently removed the conditional commitment, raised the overnight rate and re-established the standard operating framework for the implementation of monetary policy.

Timeline

November 5, 2009

Changes to Policy Regarding the Non-Mortgage Loan Portfolio as Collateral for the Bank of Canada's Standing Liquidity Facility (SLF)

Given improved conditions in funding markets, the Bank of Canada is announcing that, starting 2 February 2010, its temporary measure of allowing Large Value Transfer System (LVTS) participants to assign their non-mortgage loan portfolios as eligible collateral for LVTS and Standing Liquidity Facility (SLF) purposes will be gradually reduced from 100 per cent to 20 per cent of each participant's total pledged collateral.
Content Type(s): Press, Market notices
April 21, 2009

Bank of Canada lowers overnight rate target by 1/4 percentage point to 1/4 per cent and, conditional on the inflation outlook, commits to hold current policy rate until the end of the second quarter of 2010

The Bank of Canada today announced that it is lowering its target for the overnight rate by one-quarter of a percentage point to 1/4 per cent, which the Bank judges to be the effective lower bound for that rate.
Content Type(s): Press, Press releases