Credit crisis hits Canada
TORONTO - The global credit crisis is starting to restrict the ability of Canadians to obtain loans for mortgages, cars and investments, Canada's finance minister said Thursday.
Finance Minister Jim Flaherty said he is looking to increase liquidity in the market but declined to release details.
In an indication of the uncertainty in the markets, Canada's private banks declined to pass on to consumers the full half percentage point cut in interest rates announced by central banks around the world. The banks cut interest a quarter of a point instead.
Prime Minister Stephen Harper said he was disheartened by the banks' decision and predicted the savings would be passed on eventually.
"We're obviously disappointed with the fact that the rate cut won't be passed on immediately," Harper said at an election campaign stop in Richmond, British Columbia.
"I think we will see that rate cut passed on in time."
Harper cited a new report by the World Economic Forum that describes Canada's banking system as the world's strongest.
"There is no question, no possibility of bailing out the banks," Harper said. "The banks aren't seeking to be bailed out."
Flaherty said earlier that Canada has a competitive banking system and that Canadians should wait and watch for further rate cuts. He pointed out that Australia's banks only passed along 80 of the 100 basis point cut their central bank made this week.
"What I've said to the banks is do as much as possible in the present circumstances," Flaherty said.
Flaherty called his news conference in advance of his meetings with other G7 ministers in Washington — meetings he called the most important he's attended since becoming finance minister.
"We have to ensure that credit continues to be available," Flaherty said. "I'm concerned about that. I know many Canadians are because it affects the costs of mortgages, it affects the costs of car loans, it affects loans to small business, the ability of business to invest and reinvest."
Harper has maintained that Canada will avoid the mortgage meltdown and banking crisis that are hitting the United States and Europe hard.
Harper's Conservative party has been sliding in the polls since he said during an election debate last week that Canadians weren't concerned about their jobs or their mortgages.
Harper said Tuesday the stock market was overreacting to bad news and that stocks were cheap.
The prime minister called early elections for Oct. 14 in hopes his party can increase its numbers in the 308-seat Parliament. - AP
Finance Minister Jim Flaherty said he is looking to increase liquidity in the market but declined to release details.
In an indication of the uncertainty in the markets, Canada's private banks declined to pass on to consumers the full half percentage point cut in interest rates announced by central banks around the world. The banks cut interest a quarter of a point instead.
Prime Minister Stephen Harper said he was disheartened by the banks' decision and predicted the savings would be passed on eventually.
"We're obviously disappointed with the fact that the rate cut won't be passed on immediately," Harper said at an election campaign stop in Richmond, British Columbia.
"I think we will see that rate cut passed on in time."
Harper cited a new report by the World Economic Forum that describes Canada's banking system as the world's strongest.
"There is no question, no possibility of bailing out the banks," Harper said. "The banks aren't seeking to be bailed out."
Flaherty said earlier that Canada has a competitive banking system and that Canadians should wait and watch for further rate cuts. He pointed out that Australia's banks only passed along 80 of the 100 basis point cut their central bank made this week.
"What I've said to the banks is do as much as possible in the present circumstances," Flaherty said.
Flaherty called his news conference in advance of his meetings with other G7 ministers in Washington — meetings he called the most important he's attended since becoming finance minister.
"We have to ensure that credit continues to be available," Flaherty said. "I'm concerned about that. I know many Canadians are because it affects the costs of mortgages, it affects the costs of car loans, it affects loans to small business, the ability of business to invest and reinvest."
Harper has maintained that Canada will avoid the mortgage meltdown and banking crisis that are hitting the United States and Europe hard.
Harper's Conservative party has been sliding in the polls since he said during an election debate last week that Canadians weren't concerned about their jobs or their mortgages.
Harper said Tuesday the stock market was overreacting to bad news and that stocks were cheap.
The prime minister called early elections for Oct. 14 in hopes his party can increase its numbers in the 308-seat Parliament. - AP
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