Thanks, and good evening, everyone.
We'll provide a very brief overview and then be happy to answer any questions.
Part 5, division 5 relates to emergency lending assistance. Emergency lending assistance is a loan or advance to eligible financial institutions or financial market infrastructures at the Bank of Canada's discretion. It is designed to provide last-resort liquidity to individual financial institutions facing serious liquidity problems.
In 2015, the Bank of Canada modified its emergency lending assistance policy to include mortgages as acceptable collateral. This decision to accept mortgages as collateral significantly increased the capacity of eligible financial intuitions to draw on emergency lending assistance. It also provided the Bank of Canada with greater flexibility in the types of collateral it may choose to accept. However, under the Bank of Canada Act, the bank is legally required to lend on a secured basis, meaning it must obtain a valid first-priority security interest in any collateral pledged for emergency lending assistance. In the case of collateral backed by real properties, such as mortgages, this requires the transfer of the legal title and its registration in the land registry or title office where the mortgage is located. This process is time-consuming and effectively limits the quantity of collateral that can be pledged.
The proposed amendments seek to overcome these impediments and allow the Bank of Canada to take mortgages as collateral in meaningful quantities by allowing loans secured by real property to be pledged by assignment only, that is, transferring the rights to the mortgage without registration. The proposal also seeks to clarify existing provisions in the Canada Deposit Insurance Corporation Act, protecting the bank of Canada and the Canada Deposit Insurance Corporation's ability to exercise their rights as secured creditors on obligations secured by real property or immovables, whether on a secured or assigned basis. It's a related consequential amendment.