Flaherty expected to announce more help for banks
Last Updated: Thursday, October 23, 2008 | 6:49 AM ET Comments48Recommend11
Finance Minister Jim Flaherty has scheduled a news conference for Thursday morning before stock markets open amid speculation that the federal government is ready to take major steps to guarantee loans and bolster the security of bank deposits.
The anticipated measures are aimed at helping Canadian banks weather the storm during the global financial crisis sparked by the collapse of the credit market in the United States.
By doing so, Canada would follow similar steps taken by the U.S., Ireland, Germany, Sweden and other countries.
Flaherty has insisted Canada's financial institutions are healthy, but has also warned the country is not "immune" to the spillover from the global economic turmoil.
There's also speculation the finance minister will raise insurance levels for money deposited in banks. Right now Ottawa, guarantees bank deposits up to $100,000 through the Canada Deposit Insurance Corp., a Crown corporation.
Governments in many countries have been grappling with how to stop the deterioration in the health of financial institutions as companies are forced to write off billions in losses from holdings of now worthless asset-backed commercial paper.
Earlier this month, Flaherty announced the government's $25-billion takeover of bank-held mortgages to ease a growing credit crunch and free up money for financial institutions to lend to Canadians.
