As a primary liquidity provider to the system, Central 1 manages our portfolio to ensure it has appropriate levels of liquidity to support the system during times of stress. We are well-positioned to support you and have a number of treasury programs to help you navigate these highly unusual times. Our Treasury team is closely monitoring financial markets and the broader economy, as well as the potential impact to the credit union system.
Due to historically high liquidity in the system, most, if not all, credit unions continue to experience liquidity ratios that remain within normal ranges and aren’t experiencing any shortfalls – remaining ‘green’ in their Contingency Funding Plans. Many are prudently forecasting and planning for the trend to move towards ‘amber’ as their members are unable to make payments and additional lending support is provided to those in need.
To ensure credit unions have access to the latest available information about government and Central 1 programs, we have prepared the attached Summary of Contingency Funding Plan Actions. We will update the summary as new programs become available. To support your liquidity planning, the summary is organized by liquidity risk level, similar to the schedule in the sample Contingency Funding Plan template on Secure Site. When and how a credit union employs liquidity strategies will be dependent on the situation and the individual credit union’s balance sheet composition and requirements. The summary should therefore be used as a ‘menu’ of potential solutions as opposed to a particular order.
Central 1 is here to support you as you navigate these unprecedented times. In addition to our standard products and services, Central 1 has access to the federal programs detailed in the attached summary as well as other federal support, such as the Standing Liquidity Facility and the Standing Term Liquidity Facility offered by the Bank of Canada. This ensures Central 1 can facilitate asset liquidations or borrowing in order to provide funds as needed.
We strongly encourage all credit unions to update their Contingency Funding Plans for all available liquidity resources and ensure contact information and communication channels remain relevant.
Please know that Central 1 is here to help. While that help might come through a virtual meeting, email, or phone call, we are ready to support you. We have also created a dedicated Secure Site page for COVID-19 updates, and we will continually update this page with information.
If you have any questions or comments, please reach out to Treasury@Central1.com