Improvements are especially notable at shorter maturities (such as 1-month) and are largely attributable to the liquidity facilities that have been put in place. Spreads at 3 months which peaked at about 125 basis points in Canada, are now close to more normal levels; that is, about 25 basis points.
While the Bank of Canada’s liquidity operations are focused on short-term financing, the Government of Canada has introduced measures aimed at supporting long-term financing for businesses and consumers. Let me highlight two.