On Wednesday, November 12, Ottawa agreed to help out Canadian banks that are being affected by the adverse changes in the credit markets. The measures that Ottawa will be taking to alleviate some of the problems banks are having because of the credit “crisis” are:
- the purchase of $75 billion worth of mortgages
- easier access for banks to capital markets
- extra liquidity
- less strict reserve requirements
Ottawa implemented these changes to make sure Canada’s financial sector doesn’t weaken. It is yet to be seen whether the new changes will lower the lenders’ borrowing and lending costs, but there is speculation that that may be the case. And the lenders’ savings could be passed on to consumers in the form of lower rates – so keep your eyes open.
To read an article on the subject, please visit the Financial Post.