Canada to collateralise cross-currency swaps

Finance ministry hopes two-way CSAs will cut costs and risks on hefty swaps flows

Bank of Canada: fiscal agent will post collateral on behalf of government

Canada's central bank will post collateral to its derivatives counterparties for the first time, under new agreements currently being put in place by the country's finance ministry. The two-way contracts are "expected to provide modest savings to the government, while reducing counterparty exposure," says a spokesperson for Department of Finance Canada.

The decision places Canada in a small but growing group of sovereign derivatives users to have abandoned their traditional, one-way credit