The slump in bank profitability is not, per se, a concern for policymakers. The banking sector needs to adjust to a changing market environment just like any other economic sector.
In response, the Bank of Canada provided exceptional liquidity to core financial institutions, with the expectation that this liquidity would cascade through the financial system. This was indeed the case this past spring. With the intensification of the crisis since September, our liquidity efforts have been significantly expanded.