OTTAWA — The Bank of Canada is calling for a series of tweaks it says would help shore up the country's financial system from future periods of stress.
"We're using this period of relative calm to sharpen our tools," Carolyn Wilkins, the central bank's senior deputy governor, said in remarks prepared for a speech Tuesday in Montreal.
"These steps will all help markets in normal times. But we need to be ready for when times aren't so normal."
The central bank's senior deputy governor announced several proposed tweaks Tuesday that she said would help inject funds into the system amid any turmoil down the road.
Among other things, the Bank of Canada — which can provide funds to the government or to commercial institutions like the big banks — wants to limit its emergency-lending program to institutions that have a credible recovery plan in place.
Wilkins said the bank learned during the last financial crisis about the importance of being able to pump liquidity into the markets — and how its absence can amplify financial distress.
She said all Canadians are affected by liquidity — which usually refers to the ability to tap into savings or credit.
Business owners, she said, need to have reliable, reasonable access to financing while individuals need the ability to easily tap their mutual funds or savings accounts.
The bank outlined the proposed adjustments in two consultation papers it posted on its website Tuesday. It is accepting public input on the updates until July 4.
