The Bank of Canada is seeking comments from direct participants in the Large Value Transfer System (LVTS) and other interested parties on the proposed eligibility criteria for accepting asset-backed commercial paper (ABCP) as collateral for the Bank of Canada's Standing Liquidity Facility (SLF). Written comments are requested by 14 March 2008. The final terms and conditions for accepting ABCP as collateral for the SLF will be announced by 31 March 2008. Recognizing that the market for ABCP in Canada is still evolving, the Bank of Canada intends to review these criteria in a year's time and announce the results of that review by 30 June 2009.
Well, that would be an interesting turn of events. How much of this comes from Mr. Carney's time in the financial world? Is it a good idea? What are the cons?
Frankly, I don't know, but I'm looking forward to commentary on this move.