ones. with regard to expansion : the regular term pra facility has been the " workhorse " of the bank's liquidity program since the onset of the crisis. it was reintroduced in september 2008, following a pause, starting in june, that followed improvements in funding conditions. the term of pras was increased from one month to both one and three months, and the frequency of term pra operations was increased to weekly ( from biweekly in the spring ). in addition, we substantially increased the size of this term financing from $ 4 billion in the spring of 2008 to about $ 35 billion currently. the value outstanding peaked at $ 37 billion in december 2008. and we expanded the list of eligible counterparties to include not only primary dealers, but also all participants in the lvts. finally, we expanded the list of eligible securities for the term pras to include bank - sponsored abcp and certain u. s. treasury securities, consistent with the expansion of slf collateral mentioned earlier. the bank of canada has also introduced three new liquidity facilities since last summer, one of which is an expansion and replacement of another [ table : bank of canada liquidity facilities introduced since 2007q4 ]. bank for international settlements ( bis ), " central bank operations in response to the financial turmoil " ( cgfs papers no. 31, bis, 2008 ). available at : http : / / www. bis. org / publ / cgfs31. pdf? noframes = 1. the term loan facility was introduced in november. the aim of this facility is to give lvts participants increased flexibility in efficiently managing their balance sheets. it allows direct lvts participants to use their non - mortgage loan portfolios, which consist of high - quality but illiquid assets, as collateral for term loans. two billion dollars is auctioned weekly for a 28day term. the maximum amount outstanding at any one time was about $ 4. 2 billion. although the term loan facility has had the highest take - up of the new facilities, its use has been relatively modest, largely because the minimum bid rate is the bank rate 3 [ chart : weekly par value outstanding for boc liquidity facilities ]. the bank rate is 25 points above the target for the overnight rate. when the expected target for the overnight rate is significantly lower than the current target, the " penalty " is effectively larger when the term goes past the next fixed announcement date. at

liquidity policies. 1 since the onset of the crisis in august of 2007, there has been a general global decline – and in some cases, a complete disappearance – of liquidity in key funding markets. liquidity is essential for both the efficiency and the stability of the financial system, and this decline, especially in bank - funding liquidity, has been of great concern to central banks. the liquidity of bank - funding markets is related to the liquidity of asset markets in general, and problems in one market can spill over into the other. it was in this context that the bank for international settlements'committee on the global financial system ( cgfs ) made recommendations aimed at strengthening the effectiveness see d. longworth, " work in progress : the bank of canada's response to the financial turbulence " ( speech to the canadian association for business economics, kingston, ontario, 26 august 2008 ). available at : http : / / www. bankofcanada. ca / en / speeches / 2008 / sp08 - 10. html. of central banks in dealing with liquidity problems, including pressures in funding - markets. 2 two recommendations focused on the central bank's ability to conduct liquidity operations effectively, even when liquidity in key markets is severely constrained. in concrete terms, this means that central banks should be prepared, if necessary, to take steps that go beyond adjusting the aggregate supply of bank reserves to meet changes in demand. these steps include providing an increased volume of term funds, conducting operations against a broad range of collateral, and conducting operations with a broad range of counterparties. this is precisely what the bank of canada and other central banks have been doing over the past year and a half. from august 2007 to august 2008, the bank of canada made two significant changes to support liquidity, and thereby the stability of the canadian financial system and the efficient functioning of financial markets. first, we introduced a term purchase and resale agreement ( pra ) facility to purchase securities from primary dealers and resell them to the original owners at term. second, we broadened the range of securities acceptable as collateral for the standing liquidity facility ( slf ) – the overdraft facility accessible to participants in the large value transfer system ( lvts ) – to include certain types of asset - backed commercial paper ( abcp ) and u. s. treasuries. since august 2008, the bank has both expanded its liquidity facilities and introduced new