CANADA: Bank of Canada Implements New Framework for Its Financial Market Operations

Friday October 9 2015

The Bank of Canada has published summaries of, and responses from comments received through consultation processes initiated in May 2015 regarding the Bank of Canada`s framework for financial market operations.

Taking into consideration the feedback received, the Bank of Canada has decided to implement the following changes to its framework for financial market operations:

• introduce a regular program of term repo operations as proposed
• reduce the Bank’s purchases at primary auctions of nominal Government of Canada bonds from 20 per cent to 15 per cent beginning in 2015 Q4, with a view to lowering it further to 10 per cent by end-2016
• refine operational parameters for SPRAs and SRAs, with some adjustments relative to the original proposal
• refine some of the operational parameters of the Bank’s Securities Lending Program
• introduce a Contingent Term Repo Facility (CTRF) as described in the consultation document

The Bank expects to introduce secondary market purchases of Government of Canada debt securities, if necessary, at a later date.

As of the 1^st October 2015, the new terms and conditions reflecting the above changes applied.

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