Bank of Canada Won’t Rescue Banks in Crisis
May 8th, 2008WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
I liked the Canadian dollar before. I like it even more now.
Via: TheCanadianPress:
The governor of the Bank of Canada says he will take a tough stand with financial institutions that wind up near bankruptcy because of poor decisions.
Mark Carney says the central bank won’t bail out Canadian financial institutions like the U.S. government did when the Bear Stearns brokerage, one of the giants of Wall Street, ran afoul of the subprime mortgage mess.
“If you cannot make a judgment (on the value of an asset), you should not own the security,” Carney told a Senate committee yesterday.
“There is very high value, if a situation came about, to ensuring the shareholders and senior managers bear the full consequences of their actions,” he said.
“The Bank of Canada has a role to become lender of last resort, but we would do that on the advice of the Superintendent of Financial Institutions that the institution is solvent, not because the institution needed money.”
Carney said the central bank would come to the rescue of a chartered bank in the case of a temporary liquidity problem — if the institution had sufficient capital to be considered viable.
But he added if investors and managers thought there would always be a safety net, they would be encouraged to take inordinate risks in order to maximize profits.
Oh Canada!
I think about Joni Mitchell every time I say oh Canada.
I’m rubbing my eyes to assure that I’m reading this right:
“The Bank of Canada has a role to become lender of last resort, but we would do that on the advice of the Superintendent of Financial Institutions that the institution is solvent, not because the institution needed money.”
Ben Bernanke says he does all he does because he studied the Great Depression. Well Ben, you and your ho bags at the Federal Reserve forgot to learn what the word “integrity” means.
Bear Stearns should have crashed and given us a ‘taste” of financial Argmeggedon. Should have sent the fear of God into all.
But NO. Ben, your policies here in America shore up GAMBLE-HOLICS!
While you’re at it Ben, you can send me money too for my cigars and red wine. I know its not good for me, but hey, if you’re going to give me the money, hey, I’ll just keep it up. The hell with what it does to me.
Same with the U.S. financial sector. FEED THEIR HEADS. These nimwats are on a freaking LSD trip, and kids, if you’ve never taken ACID – well, this is not a recommendation to buy, sell, or ingest, any freakin hallucegen, but the federal reserve and the Treasury have gone boingo. There’s nothing rationale anymore. Maybe they’ve been sucking up the agave, peyote, Afghanistani heroin, go figure.
Compared to the statement of this Canadian figure, U.S. govmint officials are on a mind bender.
STill, full three weeks later, I’m still waiting for someone to say something about the fact that George Bush still thinks the answer to ALL WOES AROUND THE WORLD is to MAKE HIS TAX CUTS PERMANENT.
I’m sorry, I’m ranting and raving and just better go shut up.