By Courtney Tower

OTTAWA (MNI) - The Bank of Canada Tuesday announced the end of two of three liquidity programs, which were started with the advent of the global financial crisis to provide funding for financial institutions.

The BOC said on its Web site that the term Purchase and Resale Agreement (PRA) for Private Sector Instruments would end with a final operation October 27. A Term Loan Facility (TLF) will end with a final operation on October 28.

In an auction Tuesday, of the Term PRA for Private Sector Instruments, of the C$500 million offered only $280 million was taken up. The latest TLF, with $1 billion offered, will be auctioned Wednesday (Sept. 23): it has never been taken up. There have been speculations for many months that it would be ended.

The BOC said the remaining emergency liquidity instrument, a Term PRA for a few topmost financial institutions, will continue through to at least the end of January, 2010. But auctions will be held under it only bi-weekly, instead of the usual weekly, starting on October 26. These always have been fully taken up.

The BOC said it is ending the two facilities because of "the improved conditions in funding markets." These better conditions were seen in "lower market-based funding costs and the lack of coverage in recent auctions for temporary liquidity facilities."

** Market News International Ottawa **