4  BIS Review 41/2009  In order to keep the system functioning, central banks have responded aggressively and creatively to supply liquidity. These efforts have been largely successful with interbank lending rates narrowing substantially since the worst periods last fall.
Reflecting both the strength of our financial system and the timeliness of the Bank of Canada’s response, Canadian spreads have been the best performing of the major economies. Conditions have been slower to improve in other markets. The issuance of commercial paper (CP) and asset-backed commercial paper (ABCP) has stabilized, but spreads remain wide and maturities relatively short.