9 While the Bank currently has a securities-lending facility (whereby it makes available from its balance sheet Government of Canada securities that are temporarily in high demand in the market), the loans under this facility have a term of one business day and are intended to address stresses in the repo market for a single security.
The term securities-lending operations would be used to provide longer-term liquidity more broadly to financial market participants by increasing the supply of high-quality securities that could be used for collateral at times when there is a shortage. Term loan facilities would be most useful when liquidity premiums in money markets are distorted and when at least two deposit-taking financial institutions face liquidity shortages.