September 19, 2008 / 1:44 PM / in 9 years

Carney holds crisis talks with banks

OTTAWA (Reuters) - Bank of Canada Governor Mark Carney has held his first face-to-face meeting with the country’s top bank executives since the crisis sweeping through global financial markets escalated this week, the bank said on Friday.

Carney met on Thursday with the chief executives of Canada’s five major banks -- Royal Bank of Canada, Toronto-Dominion Bank, Canadian Imperial Bank of Commerce, Bank of Nova Scotia and Bank of Montreal.

“Given the current environment in global financial markets, it is not surprising that we are talking more frequently to share information,” bank spokeswoman Jill Vardy said.

The bank would not give details of the talks, which took place in Toronto, but Vardy said Carney wanted to provide the banks with “some context around the announcement the bank made in coordination with other central banks early Thursday morning.”

“We don’t have any information on when they plan to meet again, but we can expect frequent and ongoing discussions, given the current financial climate,” she said.

In coordination with other central banks around the world, the bank announced a $10 billion swap facility with the U.S. Federal Reserve to help free up bank-to-bank lending. But the Canadian effort is more a show of moral support as the bank said domestic institutions are not experiencing liquidity problems in managing their U.S. dollar funds.

However, in a sign that money markets in Canada are stressed, the Bank of Canada on Thursday said it would resume liquidity operations via 28-day purchase and resale agreements, buying C$2 billion worth of securities in the market on Friday and selling them back on October 17.

Reporting by Louise Egan; Editing by Peter Galloway

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