Common Features that made Canada and Australia’s banking systems to be resilient during the global financial crisis
Funding structure is one of the common features. The banks’ funding structure entailed both depository and wholesale market funding. The ratios of depository funding over total assets reflect on the bank’s exposure to financial risks. Therefore, the amount of depository funding helped the two banks to show a good performance during the global financial crisis. Also, the funding structure is an imperative interpreter of bank resilience during the financial crisis. Banking system of Canada relied heavily on depository funding. It got its principal funding from deposits. This was why the large deposits of Canadian banks were core deposits. Their small deposits and transaction deposits were sticker than their hefty deposits. As a result, the Canadian banks were able to give one stop service in their asset management. In aIDition, the banks have universal banks since history. Therefore, they encountered less competition for household savings from other competitors. This trend enabled the banks to become resilient during the financial crisis (Ratnovski, 2009, p.10-11).
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