Canadian banks, finance minister bicker over lendingDecember 24th, 2008 - 12:58 pm ICT by IANS
Toronto, Dec 24 (IANS) With the Canadian finance minister blaming them for not giving enough loans to stimulate the economy and issuing an ultimatum, major banks have hit back, issuing reports and advertisements to rebut the charges.Giving them a deadline last week, finance minister Jim Flaherty had said: “We expect the banks to provide adequate credit in Canada”.
He said he and the head of the nation’s central bank will meet bank chiefs in January.
“I expect them to make it evident to us that they are taking steps to make that (credit) more available in Canada,” Flaherty had said.
The banks have countered the charge, saying they are consistent in lending and politicians should not force them to take “crazy risks”.
Firing back again Tuesday, the top banks issued reports and advertisements to show that their lending has actually grown during the current crisis.
Toronto-Dominion (TD) Bank, which is the country’s second largest, issued reports to show an upward trend in its lending to companies and consumers.
The bank said its lending didn’t slacken even after the failure of Lehman Brothers in September which caused a credit squeeze by banks around the world.
“As the economy slows, understandably there’s concern from governments and the public that banks may restrict credit. What’s clear from our reporting today is that TD continues to supply credit to its customers and clients,” said TD Bank president and CEO Ed Clark.
“Our personal and commercial lending in Canada has continued to grow through each quarter of 2008, despite a general slowdown in credit growth.”
To counter the finance minister’s argument, Bank of Montreal also placed a full-page advertisement in the respected Globe and Mail newspaper to show its “year after year of loan balance growth”.
Meanwhile, the finance minister Tuesday met his newly appointed 11-member economic advisory council - that includes Indo-Canadian techie and BlackBerry founder Ajit Someshwar - to discuss the crisis and the upcoming budget.
“In this time of unprecedented economic turmoil, I am bringing some of Canada’s best minds together to find solutions and help launch a timely recovery,” the minister said.
“I will look to this group for advice on Budget 2009, and will continue to consult them in the months ahead,” Flaherty added.