The Large Value Transfer System (LVTS) is a critical component of the Canadian financial system. Virtually all interbank Canadian dollar financial market transactions are settled via LVTS payments. Failure to provide LVTS payment services on an ongoing basis could have a material negative impact on Payments Canada’s participant financial institutions, other Financial Market Infrastructures (FMIs), Canadian financial stability and economic activity in general. The LVTS also plays an important role in four of Canada’s other systemically important clearing and settlement systems: the Continuous Linked Settlement system (CLS), the Canadian Derivatives Clearing Corporation (CDCC), the Canadian Depository for Securities (CDS) and SwapClear.
Disruptions or failures to Canada’s retail payment system, the Automated Clearing Settlement System (ACSS), also have the potential to pose risks to Canadian economic activity. However, considering the volume of payments in the ACSS and the participant exposures relative to their capital, the ACSS does not pose a systemic risk to the Canadian financial system.