The measures taken by the Bank of Canada to resolve the problems of market functioning and confidence are showing signs of success, indicated the BoC in its review of the financial system.
Additional things to remember
“The bank’s facilities and purchasing programs are used less today than they were at the start.”
“The BoC continues to assess the impacts of its measures and can adjust the scale of the programs as market conditions change.”
“There are many paths to recovery; political support will have to be flexible and adapt as the situation changes.”
“Strong policies have put a floor in the Canadian economy and laid a solid foundation for its recovery; federal government support for households and businesses directly mitigates the loss of income. ”
“The effects on demand are rooted in lost revenue and uncertainty about the seriousness of things.”
“The energy sector’s ability to secure refinancing will be particularly challenged with low oil prices; the sector will be helped by new credit programs under development.”
“COVID – shock 19, riskier businesses are finding it difficult to access more fragile markets, such as the US leveraged loan market.”
“Despite mortgage deferrals and additional borrowing, some households are likely to fall behind on their loan payments.”
“The longer the income shock lasts, the greater the risk of rising consumer insolvencies; what started as a cash flow problem could become a solvency problem for some businesses.”
“The financial system remains resilient, but the outlook for Canadian economic activity is very uncertain; Canada’s six largest commercial banks are well positioned to handle the consequences. ”
the USD / CAD The pair rose slightly on these remarks and was last seen up 0.25% on the day at 1.4135.