Here's an email that was sent to her:
Dear Diane
I read your column with great interest.
In my just published book “Relentless Change: A Casebook for the Study of Canadian History” which goes to 2005 I wrote,
“In terms of organization, the federal government had not privatized the large financial crown corporations as it had privatized the non-financial corporations. The same five large financial crown corporations were still in existence – CMHC, the Bank of Canada, EDC, FCC and the Business Development Bank of Canada [formerly called the Federal Development Bank] – and all five were among the largest financial institutions in the land[1].
The largest of these five by far in 2005 was CMHC, with assets of over $100 billion. In the mid 1980s, CMHC had grown much more rapidly than most corporations in the public or private sector because of lower eligibility requirements for mortgages. As a consequence of this growth the corporation became more than twice the size of the Bank of Canada.”
In the next to last draft i also made the point that it was as large as such major private sector corporations as National Bank and Great West Life.
However 13 months ago when the credit crisis was just starting i thought the exposure of Fannie Mae and Freddie Mac @ $5 trillion was significantly greater than CMHC but your article has me thinking again.
Thank you for that.
Joe Martin, Director of Canadian Business History,
Rotman School of Management
Read more: http://network.nationalpost.com/np/blogs/francis/archive/2009/10/21/cmhc-canada-s-freddie-and-fannie.aspx#ixzz0nsYMtNff
And this...
Truly disgusting!
A couple of weeks ago, Peter Routledge of credit analyst Moody’s pointed out that the overheating of the housing market was goosing an unsustainable increase in household borrowing more generally. “As witnessed in the United States,” he wrote, “this movie does not end well.” Specifically, once the punchbowl of low interest rates disappears, households find themselves in trouble, and so do their bankers.
Mr. Routledge noted that Canadian banks likely wouldn’t wind up in the same depths as their U.S. counterparts, but that is only because their riskiest mortgages are backstopped by CMHC. But this makes the systemic threat to the Canadian economy greater.
The U.S. crisis was massive but did not fall entirely on Fannie and Freddie. It was shared with other financial institutions. Nevertheless Fannie and Freddie both failed and had to be taken into government “conservatorship.” Mr. Routledge suggests that the situation is more “secure” in Canada, but as a recent report from the Fraser Institute points out, what this really means that the Canadian system features “massive taxpayer exposure.”
Read more: http://network.nationalpost.com/np/blogs/fpcomment/archive/2010/02/11/peter-foster-canada-moral-hazard-corp.aspx#ixzz0nsUEABGI
And yet more can be found here:
http://thetyee.ca/Opinion/2009/10/22/BubbleWillBurst/
Mr. Routledge noted that Canadian banks likely wouldn’t wind up in the same depths as their U.S. counterparts, but that is only because their riskiest mortgages are backstopped by CMHC. But this makes the systemic threat to the Canadian economy greater.
The U.S. crisis was massive but did not fall entirely on Fannie and Freddie. It was shared with other financial institutions. Nevertheless Fannie and Freddie both failed and had to be taken into government “conservatorship.” Mr. Routledge suggests that the situation is more “secure” in Canada, but as a recent report from the Fraser Institute points out, what this really means that the Canadian system features “massive taxpayer exposure.”
Read more: http://network.nationalpost.com/np/blogs/fpcomment/archive/2010/02/11/peter-foster-canada-moral-hazard-corp.aspx#ixzz0nsUEABGI
And yet more can be found here:
http://thetyee.ca/Opinion/2009/10/22/BubbleWillBurst/
No comments:
Post a Comment