In a newly released study, the centre-left group said that government support for Canadian banks from October 2008 to July 2010 was much higher than the government admitted.
All told, the study counts $114-billion worth of guarantees and financial aid for Canada’s big banks from government agencies such as the Bank of Canada and the Canada Mortgage and Housing Corp.
And while it makes for interesting reading, most of the information in the document has already been widely disclosed by the Bank of Canada and Ottawa.
Think tank claims Canada’s bank received secret bailout
The Canadian Centre for Policy Alternatives is accusing the government of giving this country’s banks a multibillion-dollar secret bailout in 2008.
“The federal government claims it was offering banks ‘liquidity support’ but it looks an awful lot like a bailout to me,” said study author and centre economist David MacDonald in a statement.
Read the full story here
When the global financial system almost ground to a halt in 2008 central banks around the world responded by extending billions of dollars of emergency liquidity to banks. The idea was that, even if individual players weren’t in trouble they would likely be curtailing lending which would have a seriously negative impact on the real economy. So the U.S. Federal Reserve, the Bank of England, and the Bank of Canada among others flooded the system with money by dramatically boosting short and medium term loans to the banking system.
You can find a story we did on the subject here.
http://business.financialpost.com/2011/11/28/why-bank-profits-are-shrinking/
