Liquidity disappeared from markets, as participants sought to protect their own liquidity by increasing their cash holdings. Amid the uncertainty, credit markets began to seize up. The Bank’s priority from March to May was to restore proper functioning to financial markets so that Canadian households, businesses and governments could access credit to withstand the crisis. This should also help set the stage for recovery.
Under the leadership of my predecessor, Governor Poloz, as well as Senior Deputy Governor Wilkins, the Bank did an outstanding job restoring smooth functioning to key markets, ensuring ample funding and market liquidity. The Bank revived some emergency programs used during the global financial crisis over a decade ago. And it brought into operation several new measures with remarkable speed and precision.