However, liquidity further out the maturity spectrum was more problematic, owing in part to the precautionary build-up of liquidity by financial institutions. This raises the question of whether some market failures might be better dealt with if the central bank had a facility that would provide liquidity at terms longer than overnight, collateralized with a possibly wider range of securities.
The Canadian financial system has fared relatively well through this crisis, thanks to effective regulation and prudent practices that have worked like sandbags to protect our financial system from the storms in today's global economy. In this respect, we may be a model for much of the world.