My finance view

OTTAWA–The Bank of Canada has announced the second $2- billion liquidity infusion in the past week in an effort to unclog tight credit markets.

The central bank said Tuesday it will relax credit conditions for the chartered banks to borrow up to $2 billion for 84 days starting Sept. 24.

At the same time, it will roll over last week's $2-billion purchase and resale agreement for an additional 27 days once it expires on Oct. 17.

The bank said the measures are needed to support the efficient functioning of financial markets, and it will continue to provide liquidity as long as required.

Global financial markets have been in turmoil following the recent collapse of large Wall Street titans that became overexposed to the U.S payday loans. mortgage crisis.

The result has been that financial institutions have been reluctant to lend money, making it more difficult and expensive for businesses and individuals to borrow.

Source