Today, Jim Flaherty, Canadian Minister of Finance, announced the official closing of a senior funding facility to restructure non-bank sponsored asset-backed commercial paper (ABCP). The plan to create the senior funding facility, a partnership between the Government of Canada and the provincial governments of Quebec, Ontario and Alberta, stems from liquidity disruptions in the Canadian ABCP market that began in 2007, and involves issuing new long-term notes to investors in exchange for their short-term paper. According to Mr. Flaherty, the facility is part of the "[o]n-going commitment to protect Canada's financial stability and ensure the health of our capital markets."

The closing of the senior funding facility comes one day after the Bank of Canada announced a reduction in overnight target interest rates to 1% in response to the "intensifying financial crisis spilling over into real economic activity."