extent and duration of the tightening of credit conditions in canada and, hence, about the tempering effect this will have on the growth of domestic demand. gauging the effects of the financial market turbulence on credit conditions, and the implications for the canadian economy, will be one of the bank's most pressing tasks over the coming months. we will provide analysis of these issues in our next monetary policy report, which will be published on 18 october. conclusion ladies and gentlemen, let me conclude. this was not a very pleasant summer for many people. turbulence in financial markets is not easy to deal with, and it is certainly not welcome. but if we can learn from these events and retain the valuable lessons, then global financial markets can emerge from this turbulence stronger and more efficient than before. ultimately, this can be to the benefit of us all.

a fundamental work - out, or restructuring, of third - party abcp is required. discussions in montreal between investors and liquidity providers as to how to achieve such a restructuring are progressing. i would encourage the parties involved to support this process – all investors and all international banks. i remain hopeful that, over time, this process will lead to useful results. the role of the central bank now let me talk about the actions of the bank of canada over the past seven weeks. essentially, our actions helped us fulfill two fundamental roles of a central bank – providing liquidity to the payments system, and formulating monetary policy. in terms of the first role, it is absolutely normal and proper that central banks should provide liquidity to the payments system, especially when financial institutions are faced with markets that have become illiquid. this is precisely the situation in which we found ourselves this summer. with money markets seizing up, many institutions found it difficult to obtain necessary liquidity. so the bank of canada, like other central banks, made it clear that institutions could access our regular liquidity facility when required. the bank of canada's standing liquidity facility can be accessed daily, at a rate 25 basis points above our target for the overnight rate, by direct clearers involved in canada's wholesale payments system. to access this liquidity, institutions can pledge a range of easily priced securities as collateral. the events in august placed strong upward pressure on the overnight interest rate, moving it above our target. and so we carried out open - market buyback operations to inject liquidity, with the goal of bringing the actual overnight rate closer to our target. we also temporarily expanded the list of securities that market participants could use as collateral in these buyback operations. in addition, we provided liquidity by increasing our supply of settlement balances as we normally do when we see an increased demand for cash balances. all told, our actions were effective in helping to improve the functioning of the overnight money market. so we have now restored our original list of securities eligible for use in buyback operations, and we have gradually reduced the level of settlement balances. and while it is true that many term money market spreads remain abnormally wide, the market is functioning. there have been increasing numbers of transactions in this area and spreads are beginning to narrow. in these circumstances, there does not appear to be anything the bank of canada could usefully do to improve the functioning of this market. the events of