Canada as major holder of Treasuries

What attracts eyes in the recent Treasury securities buyers is Canada's emergence as one of the major holders of the Treasury securities. In fact, Canada's holdings have increased by a factor of about 15 from 8.4 billion US dollars in January 2009 to 125.2 billion dollars in October 2010. Given that the US Treasury statistics didn't mention Canada at all before 2008, "the rise of Canada" sounds very sudden.

One might see the reason as an increase in Canada's foreign reserves by the Bank of Canada's intervention into currency markets, stemming the currency's appreciation to underpin exports. But Canada's foreign reserves have gained only 14 billion dollars so far from January 2009, a meager amount compared to 117 billion dollars increase in the US Treasury securities holdings.

Then, what is the true reason? I haven't had the definite answer, but I guess it is, as is the case with the UK, thanks to custodians which hold US Treasuries on behalf of others. For example, Royal Bank of Canada, the largest bank in Canada, acquired JPMorgan Chase & Co's investment adviser servicing business, which was inherited from Bear Stearns. Canada's bank might be seen as an alternative of custody to the US counterparts, which have been grappling with the banking crisis.