Several projects are under way to create instruments for investing in bonds or loans of unlisted companies, most of them based on the creation of closed-end credit funds. This may help to channel funds rapidly to issuers and create a market that could, as it reaches a suitable size and becomes sufficiently liquid, attract even major institutional investors.
Reserves help insure against rollover risks for public borrowing.2 While Canada has not faced any such difficulties since the Second World War, the Government of Canada reassessed its own potential liquidity needs in the wake of the global financial crisis. It opted for a larger buffer—and accordingly, beefed up both its demand deposits and its foreign exchange reserves.