A senior Bank of Canada official says the central bank is keeping a close eye on the stresses to the global banking system ahead of its next interest rate decision and monetary policy report in April.
In a speech to the National Bank financial services conference, Bank of Canada deputy governor Toni Gravelle says the bank is looking for any potential spillovers into the real economy from the recent banking problems in the U.S. and Europe.
U.S. regulators had to take control of Silicon Valley Bank as well as Signature Bank earlier this month to prevent wider financial problems amid a run on deposits, while Swiss authorities helped UBS to acquire Credit Suisse after its rival ran into difficulties.
Gravelle says global banks are more resilient today than they were 15 years ago, at the outset of the global financial crisis.
But he says the Bank of Canada is “ready to act” in the event of severe market-wide stress and provide liquidity support to the financial system.
The Bank of Canada’s next interest rate decision and monetary policy report is set for April 12.