Canadian banks didn't need - and didn't get - bailouts
The Canadian Centre for Policy Alternatives (CCPA) recently released a report, The Big Banks' Big Secret: Estimating Government Support for Canadian Banks During the Financial Crisis. A sensational title to be sure, and it made headlines in papers across the country, including this one. Some people seemed to be more than willing to believe that the banks, the federal government and the Bank of Canada had all kinds of secret deals during the global financial crisis to bail out Canadian banks and not tell the Canadian public about it.
Sounds like a great story. But, as is often the case, that's not what happened and the real story is not nearly as exciting or sensational. What really happened? No Canadian bank was in danger of failing, the Bank of Canada lent banks money on market terms and the Canadian Mortgage and Housing Corporation (CMHC) bought safe, insured mortgages from the banks, all so that the banks could continue to lend to consumers and businesses to help the economy through the recession. Important programs to be sure, but not a bailout.
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