Steps towards the restructuring of the banking system The establishment of an appropriate resolution framework allowed for a smooth restructuring of the banking sector. By end-2013, twelve banks had been resolved, mainly via the transfer of their healthy assets to another bank. Also, following a bidding process, the assets and liabilities of Cypriot bank branches were transferred smoothly to a Greek bank.
This improvement has been reflected in a decline in the spreads on bank financing in money markets, a moderate extension of maturities, and a substantial reduction in the cost of term funding for Canadian banks. In addition, policy initiatives have allowed banks to increase substantially their holdings of government securities, which has helped boost their liquidity situation in a capital-efficient way.