The Bank of Canada is prepared to intervene in the event of financial system stress and additional liquidity is required.

Deputy Governor of the Bank of Canada, Tony Gravelle, made this comment during a speech at the National Bank Financial Services conference on Wednesday.

He said, "The Bank of Canada's mandate to enhance financial system stability means we are ready to act if severe market pressures occur and provide liquidity to the financial system."

Adding, "We did this during the 2008-09 global financial crisis, and we did it again during the critical market disruptions that occurred at the beginning of the COVID-19 pandemic."

But in response to a question about the overall health of the Canadian banking system, Gravelle said, "We do not feel we are close to being concerned about financial system pressures."

During his speech, Gravelle said that the Canadian banking system has "a well-deserved international reputation" regarding stability, thanks to a combination of the system's structure and "sound risk management in our financial institutions."

Explaining, Canadian banks survived the global financial crisis well, and since then, their resilience has been strengthened through the implementation of higher new global standards.

But we know we are not immune to the repercussions of what happens elsewhere."

He added that the lessons learned during the bank's response to the COVID-19 pandemic will allow the Bank of Canada "to further improve and better target our responses in the event of future market disruptions."