the term securities - lending operations would be used to provide longer - term liquidity more broadly to financial market participants by increasing the supply of high - quality securities that could be used for collateral at times when there is a shortage. term loan facilities would be most useful when liquidity premiums in money markets are distorted and when at least two deposit - taking financial institutions face liquidity shortages. the fourth recommendation addresses the possibility that channels for distributing liquidity across borders can become impaired in times of turmoil, and the need for central banks to consider accepting assets denominated in foreign currency, or establishing foreign exchange swap lines among themselves. to address this issue, as noted earlier, the range of acceptable collateral for the standing liquidity facility was expanded to include u. s. treasuries, effective 30 june. swap lines also help to avoid bottlenecks in the international distribution of liquidity, potentially enabling domestic institutions to obtain foreign currency while the bank had used term pras in the past, it had done so to manage its own balance sheet during seasonal, temporary peaks in liabilities ; over the past year, however, the primary purpose was to increase liquidity in money markets. the policy for buying and selling securities under subsection 18. 1 ( 1 ) of the bank of canada act is available at : http : / / www. bankofcanada. ca / en / markets / pdf / policy _ gazette - e. pdf. for context, see w. engert, j. selody, and c. wilkins, " financial market turmoil and central bank intervention, " financial system review ( ottawa : bank of canada, june 2008 ) : 71 - 78, available at : http : / / www. bankofcanada. ca / en / fsr / 2008 / fsr _ 0608. pdf. liquidity. for many years, the bank of canada has had a swap line with the federal reserve in the united states to give it access to u. s. dollars. this facility was not needed in the recent period of turmoil, however, and may not be used often, if at all, because most canadian banks have u. s. branches or subsidiaries, and thus have access to u. s. - dollar funding through the fed's discount window. the fifth recommendation is to enhance communication with market participants and the media during times of financial stress. over the past year, in addition to its normal communications on regular operations, the bank actively

. ca / en / speeches / 2007 / sp07 - 17. html ; d. longworth, " liquidity, liquidity, liquidity " ( speech to the investment industry association of canada, 3 october 2007 ), available at : http : / / www. bankofcanada. ca / en / speeches / 2007 / sp07 - 18. html ; m. carney, " addressing financial market turbulence " ( speech to the toronto board of trade, 13 march 2008 ), available at : http : / / www. bankofcanada. ca / en / speeches / 2008 / sp08 - 3. html ; d. longworth, " credit markets, financial stability, and monetary policy " ( speech to the global investment conference, 10 april 2008 ), available at : http : / / www. bankofcanada. ca / en / speeches / 2008 / sp08 - 5. html ; and m. carney, " principles for liquid markets " ( speech to the new york association for business economics, 22 may 2008 ), available at : http : / / www. bankofcanada. ca / en / speeches / 2008 / sp08 - 6. html. the federal reserve's term auction facility, similar to the bank of canada's proposed term - loan facility, has significantly less stigma than its discount window lending. see w. engert, j. selody and c. wilkins, " financial market turmoil and central bank intervention, " op. cit. also see m. carney, " principles for liquid markets, " op. cit. - first, intervention should be targeted, aimed at mitigating only those market failures of system - wide importance with macroeconomic consequence that can be rectified by a central bank providing liquidity - second, intervention should be commensurate with the severity of the problem - third, intervention should use the right tools for the job : market - based transactions, provided through auction mechanisms, should be used to deal with market - wide liquidity problems, while loans should be used to address liquidity shortages affecting specific institutions - fourth, intervention should be at market - determined prices to minimize distortions - and fifth, the central bank should use measures that include limited, selective intervention ; an element of coinsurance ; penalty rates as appropriate ; and the promotion of sound supervision of liquidity - risk management. so that's a summary of the