Thank you, and good evening.
Division 7 of part 6 proposes to amend the Payment Clearing and Settlement Act to implement a financial market infrastructure resolution framework so that the appropriate tool kit is in place in the unlikely event that a systemically important FMI fails.
Financial market infrastructures, which are known as FMIs, are hubs for financial transactions, and facilitate the clearing, settling, and recording of payments. Certain FMIs are designated and overseen by the Bank of Canada if they are considered to pose systemic or payments risk. It is important that these designated FMIs continue operating, even at times of stress.
Therefore, these amendments would introduce a resolution framework to support the development of feasible, credible resolution plans for designated FMIs, and to provide a legal basis for federal authorities to intervene if a designated FMI is unable to recover from a stress event.
These proposed changes would help preserve financial stability, maintain critical services of the FMIs, and minimize public exposure to loss during a financial crisis.
Thank you.