Fred Daniel

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December 25, 2004 The Bank of Canada as Lender of Last Resort

As the ultimate provider of Canadian-dollar liquidity to the financial system, the Bank of Canada has the unique capacity to create Canadian-dollar claims on the central bank and the power to make secured loans or advances to chartered banks and other members of the Canadian Payments Association. The Bank supplies overnight credit on a routine basis through the Standing Liquidity Facility (SLF) to direct participants in the Large Value Transfer System, and Emergency Lending Assistance (ELA) to solvent deposit-taking institutions that require more substantial and prolonged credit. The authors review the policy framework that guides the Bank's lender-of-last-resort function, including the key issues, terms and conditions, and eligibility criteria associated with its SLF and ELA activities. Also discussed are foreign currency ELA, the relationship between SLF and ELA, systemic risk and Bank of Canada intervention, and the potential provision of liquidity to major clearing and settlement systems.

Essays on Financial Stability

Technical Report No. 95 John Chant, Alexandra Lai, Mark Illing, Fred Daniel
The four essays published here provide a useful overview for anyone interested in understanding the issues and policy environment surrounding financial system stability.
Content Type(s): Technical Reports Topic(s): Financial Institutions, Financial markets JEL Code(s): G, G2, G28

December 22, 2002 Recent Changes to Canada's Financial Sector Legislation

Significant legislative developments have occurred in Canada's financial services sector over the past decade. This article chronicles those developments and gives an overview of the key provisions contained in Bill C–8, the legislation to reform the sector that came into force in October 2001. The article briefly describes some of the restructuring trends in the financial services sector since the early 1990s and the legislative changes that affected federal financial institutions over the period 1992–2001, as well as the process leading up to the 2001 legislation and some of its key provisions. The 2001 financial sector legislation was wide-ranging. It maintained the principle of wide ownership of large banks and introduced a number of changes, including a holding company option that can give greater organizational flexibility to banks and life insurance companies; the creation of the Financial Consumer Agency of Canada to enforce consumer-related provisions as they relate to federal financial institutions; and changes to the Canadian Payments Association and the access to and governance of the payments system.

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