With the creation of the Canadian Lenders Assurance Facility, The Honourable Jim Flaherty has provided Canada with greater access to international credit markets.
Due to the recent financial market activity, the Minister of Finance announced the creation the facility, with its purpose of providing insurance on wholesale term borrowing for federally regulated deposit taking institutions. This step will ensure access to long-term funds for Canadian institutions so they may continue to lend to consumers and businesses throughout Canada, and are not put at a competitive disadvantage when raising funds for this market.
The announcement is seen as an important part of the G7 Plan of Action to stabilize the markets and restore economic growth. The program will be monitored closely along with the credit markets, and the Minister pointed out that the program has been provided at no fiscal cost to taxpayers and with no additional risks.
Consultations will be made with financial institutions regarding the Facility and additional details will be released shortly.