The Bank of Canada and the Office of the Superintendent of Financial Institutions issued a joint statement clarifying that Lynx participants may use the Standing Liquidity Facility as needed for routine liquidity management. Overnight draws are not considered exceptional liquidity measures or an indication of liquidity stress. The facility provides Lynx participants with secured intraday and overnight liquidity, subject to the Bank of Canada’s rules governing advances to financial institutions. A participant that ends the business day short of cash automatically receives an overnight advance, making such lending a non-discretionary part of the high-value payment system’s normal operation. The facility also supports monetary policy implementation by reinforcing the policy interest rate and promoting the effective functioning of Lynx.
Bank of Canada and Canada's Office of the Superintendent of Financial Institutions clarify that Standing Liquidity Facility use is routine liquidity management
The Bank of Canada and the Office of the Superintendent of Financial Institutions clarified that Standing Liquidity Facility use by Lynx participants is routine liquidity management. Automatic overnight advances are non-discretionary and are not considered exceptional liquidity measures or a sign of liquidity stress.