Similarly, securities lending (“market repo”) works well for G-Secs although wider participation (especially by large holders of G-Secs like mutual funds, insurance companies and pension funds) is required to avoid occasional episodes of excessive volatility in borrowing costs. All these regulatory measures have resulted in a consistent growth in liquidity in the repo markets.
As with the $ and $ bank notes, which were introduced into circulation over the past year, the Bank of Canada has worked with financial institutions and retailers to ease the transition from the old to the new so that the businesses that handle cash can readily adapt.