Canada had a bank bailout after all..to the tune of $114 billion
Canada’s banks were bailed out by U.S. and Canadian institutions to the tune of $114 billion, says a new report from the Canadian Centre for Policy Alternatives.
The report puts a large dent into the perception that Canada’s banks survived the financial collapse of 2008 without the need for the sorts of government bailouts seen in the U.S. and Europe.
According to the report, titled The Big Banks’ Big Secret: Estimating Government Support for Canadian Banks During the Financial Crisis, Canada’s biggest banks relied heavily on support from the Bank of Canada, the Canada Mortgage and Housing Corp. and the U.S. Federal Reserve between October, 2008 and July, 2010.
By the CCPA’s estimates, that works out to $3,400 for every man, woman and child in the country. On a per capita basis, that’s more than what U.S. banks needed. The most liberal estimates for the U.S.’s Troubled Asset Relief Program (TARP) place the cost at around $3,000 per person.
“At some point during the crisis, three of Canada’s banks—CIBC, BMO, and Scotiabank—were completely under water, with government support exceeding the market value of the company,” CCPA Senior Economist David Macdonald said in a press statement Monday. “Without government supports to fall back on, Canadian banks would have been in serious trouble.”
Over the same period, the CCPA notes, Canada’s big banks recorded a combined total of $27 billion in profits and the banks’ CEOs received an average pay raise of 19 per cent.
“For instance, Edmund Clark of TD Bank saw his overall compensation jump from $11.1 million in 2008 to $15.2 million in 2009,” the report states.
The CCPA stresses that these numbers are estimates, because the government has not released an official account of the bailouts.
“While the details around the American bank bailout are fully available to the public (due to a legal challenge forcing this information into the open), the Canadian federal government and Bank of Canada offer far less transparency.”
The study used the bank’s own public statements, as well as reports from the Office of the Superintendent of Financial Institutions (OSFI) and the Bank of Canada to put together
It says the Canada Mortgage and Housing Corp. — the governmental body that insures Canadians’ mortgages against default — bought up $69 billion-worth of mortgages from the banks.
the truth slowly comes out after a few years..just like the aussie banks who never got a bail out we find out that they did in fact get one..they dont call it that..but thats what it was.. guaranteeing liquidity..