OTTAWA (Reuters) - The Bank of Canada announced on Thursday a slight tightening of its policy on collateral that market players can pledge for the bank's Standing Liquidity Facility (SLF), citing improved market conditions.
During the financial crisis, the bank had temporarily allowed participants in the Large Value Transfer System (LVTS) to assign their non-mortgage loan portfolios as collateral for funding under the LVTS and SLF.
Starting in February, it will gradually reduce the amount of non-mortgage loans each participant can pledge as collateral. The amount will decline to 20 percent by April 2010 from up to 100 percent now.
(Reporting by Louise Egan; Editing by Jeffrey Hodgson)
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