12 Consistent with what would become our first principle, the Bank did not intervene until it became clear that liquidity distortions were taking on system-wide importance. With this measure, the Bank of Canada expanded its role to provide funding liquidity directly to major market participants to stabilize the financial system and to limit spillover effects to the broader economy.
In March 2008, in response to the pressures surrounding Bear Stearns, term PRAs were reintroduced, this time on a biweekly basis. In addition, the Bank expanded the set of assets acceptable as collateral to secure intraday exposures in the LVTS and, correspondingly, for loans provided under the Standing Liquidity Facility.