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Canada’s Big Banks - Loosen Purse Strings

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Mortgage and Lending with Dominion Lending Centres Advantage Mortgages #10756

Finance Minister Jim Flaherty said Thursday he and Bank of Canada Governor Mark Carney will meet with the heads of Canada biggest banks next month to discuss why credit remains tight in Cannada even though the federal government continues to pump cash into the financial sector.


This has been more and more evident as companies have been looking for alternative financing solutions such as equipment leasing and accounts receivable financing. A businesses inability to secure loans is one of the biggest concerns for Mr. Flaherty and Mr Carney. Mr. Carney has stated to the The Globe and Mail’s editorial board in Toronto that “banks were being too cautious with their lending, further choking an economy that is entering a recession.”

CBC News reports that “The federal government is buying $75-billion of mortgage securities from banks to help them expand their balance sheets and pledged to backstop their sales of wholesale debt. The central bank is offering billions more through short-term loans to financial institutions hurt by the credit crisis.”

There is an ongoing perception that there is less capital available due to there being less second-tier U.S. financiers.  The Bank of Canada has recognized this when Mr. Carney stated that he has no issue with the conduct of the Canadian banks.