The Globe and Mail reports in its Friday edition that the federal government will allow the Bank of Canada to retain earnings to help it recoup losses. The Globe's Mark Rendell writes that the BOC reported a $522-million loss in the third quarter of 2022, the first time it has ever lost money. It expects to be in the red for several years, as it pays out a higher rate of interest on its liabilities, mainly commercial bank deposits at the BOC, than it earns on its assets, mostly government bonds it acquired during the pandemic. Governor Tiff Macklem said Wednesday that the Department of Finance is preparing legislative amendments to address these losses. There is no risk of the BOC going bankrupt, and losses will not affect its ability to conduct monetary policy. However, they do present a conundrum as the Bank of Canada Act does not currently give the BOC a way to manage a negative equity position. The legislative changes "will allow, on a temporary basis, the Bank of Canada to retain earnings rather than remit them to the government, for the purpose of covering losses," said. Mr. Macklem. "Once positive equity is restored, we would resume our normal remittances to the Government of Canada," he said.