No (more) bailouts

Mark Carney says things are gonna change, your bank fails you go out of business. No more bailouts.

“I’m saying no bailouts,” Carney told the CBC’s George Stroumboulopoulos in a recent interview. “The objective [is] ending ‘too big to fail’.”

Carney was recently named head of the Financial Stability Board, a recently formed international agency with a mandate to oversee the international financial system. In the interview, he says the goal is to bring global rules closer to Canada’s model.

“We’re going to change the rules so the system as a whole is more resilient,” he said. “If a big global bank fails, the system goes on. [Just] that company goes away.

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jesse
Member

More like: if we're going to bail out the banks, we're going to do it in a very clever way so it can never be construed as a bailout.

registered
Member
registered

Hip waders are mandatory whenever Carney speaks. Relative to population and national GDP Canada's banks are already larger than their American counterparts:

http://en.wikipedia.org/wiki/Big_Five_%28banks%29 http://www.ffiec.gov/nicpubweb/nicweb/top50form.a

Canada's top five banks would all make America's top ten list.

bullwhip29
Guest
bullwhip29

Exactly jesse…

The banks will always get bailed out. Whether their clients and customers (not to mention all the taxpayers) get the same treatment is a whole different story. Think MF Global. It's one big, massive cup and balls routine. Completely impossible to keep track of where the stack of money is at any given moment. Bankers and well connected elite are currently putting all these EU nations through the ringer right now. The whole thing just reeks…

Carney is ex-Goldman, Bilderberg

Monti is ex-Goldman, member of Bilderberg, EU chair of Trilateral Comm.

Papademos was former vp of ECB, member of Bilderberg/Trilateral

Comm.

new IMF head Christine Lagarde has connections up the wazoo

etc, etc, etc…

Anonymous
Guest
Anonymous

"Relative to population and national GDP Canada’s banks are already larger than their American counterparts"

The other problem is all the banks are involved in the same practices. If Canada's real estate market goes bust it wont matter a whole lot if it were 5 banks or 50. They are all doing the same thing and will all feel the impact. A better idea would be to shutdown CMHC.

victoria
Member
victoria

I agree with all of you. I read it and thought – Oh really? I would like to see that.

bullwhip29
Guest
bullwhip29

@ DEFAULT NAME

Unlikely anything will happen to CMHC. It is TBTF too.

If things get dicey, expect more back door bailouts (of the big 5) from BOC followed by a loosening of the mortgage/lending rules again. The guys in charge have already telegraphed to the market that rates are going to stay low (and maybe go lower) for the foreseeable future. Not surprised to see the RE market in prime Gr Vanc neighborhoods perk up again in recent weeks after a soft spring/summer.

jesse
Member

@bullwhip29: The meme in Canada has been that the Big5 banks are to be centrally controlled through OSFI, with robust profit margins to ensure that even in recessions they can still "make a go of it".

As patriotz has pointed out before, no major Canadian bank has failed in a very long time. Remember the merger talks that sprang up a few years ago?

Troll
Guest
Troll

@jesse:

More like: if we’re going to bail out the banks, we’re going to do it in a very clever way so it can never be construed as a bailout.

Well, one way is to just have the GOC buy mortgages from the banks. Say a nice round number like $50B. That might be one way, completely hypothetical of course, not like they'd try anything like that. 😉

patriotz
Member

@Troll:

The mortgages were already CMHC insured so buying them did not change the government's exposure. What matters is the total amount of government insured mortgages (both CMHC and "private" insurers) whether still owned by the lender or not.

Don't miss the forest for the trees.

jesse
Member

@Troll: "one way is to just have the GOC buy mortgages from the banks"

If we're only talking in the hypothetical, another way is to blanket guarantee all mortgages that may, hypothetically, lose their capital adequacy ratios at some point in the future. Such a scheme, if it existed, would never be construed as a bailout.

Zhao Ziyang
Guest
Zhao Ziyang

a very nice fluff piece brought to you by the official government media.

they even do a little announcement promoting the new bills.

Makaya
Member
Makaya
For those of you interested in what's coming next in the global world, the new GEAB newsletter that I referred to before is available. In their previous newsletter (October), they forecasted the failure of major financial institutions… And what happened since then? (cf MF Global) Below is an abstract (the link to the full article is after). “Speaking of public debt, it is time to turn to the United States. The coming weeks figure to remind the world that it is this country, not Greece, that is at the epicenter of the global systemic crisis. In one week’s time, on November 23, the Congressional “Supercommittee” in charge of reducing the US federal deficit will admit its failure to find 1,500 billion US dollars in savings over ten years. Each side is already crafting arguments that will blame the other side.… Read more »
jesse
Member

@patriotz: "What matters is the total amount of government insured mortgages"

This should include not-yet-insured mortgages too. Under the MI system banks are assuming the government/insurers will act as underwriter of last resort for low-ratio loans as well, should they become high-ratio. Carney has pointed this out before.

emmi
Guest
emmi

@fixie guy: So you are saying, things could be worse in the u.s. Oddly, I find that reassuring.

Patiently Waiting
Member
Patiently Waiting

I almost choked on my Cheerios when I read this story this morning:

http://www.bbc.co.uk/news/world-asia-15739995

Should I be alarmed or not?

patriotz
Member

@Patiently Waiting:

What was the US troop count in East Asia 40 odd years ago?

Tokenism.

JBL
Guest
JBL

@Patiently Waiting "Should I be alarmed or not?"

Yup. Very soon Canadian kids would be fighting US proxy wars on Chinese doorstep. Canada like Australia are tools of US imperialistic hegemony.

Can-Can
Guest
Can-Can

@Patiently Waiting

$15,OOO,OOO,OOO,OOOBAMA! – It's Official: Total US Debt Passes $15 Trillion today.

What do you do when your creditors think it is enough? You go to war.

Bailing in BC
Guest
Bailing in BC

@Patiently Waiting:

Yes, you should

Best place on meth
Member
Active Member
Best place on meth

@Patiently Waiting:

No, you shouldn't be alarmed.

Anything China hates is good for all of us and just listen to those assholes:

"An editorial warned it was "certain" that if "Australia uses its military bases to help the US harm Chinese interests, then Australia itself will be caught in the crossfire".

So they're threatening Australia now? Helping protect Australia is harming Chinese interests, is it?

Fuck China, it should be apparent to all by now that they're the enemy.

cgh
Guest
cgh

@Best place on meth: Speaking of China, I sure wouldn't want to be Taiwan right now:

http://www.geek.com/articles/geek-cetera/chinas-m

Best place on meth
Member
Active Member
Best place on meth

China's real estate crash in full swing.

http://www.chinadaily.com.cn/cndy/2011-11/16/cont

klipsh
Guest
klipsh

Best place on meth: "Fuck China, it should be apparent to all by now that they’re the enemy."

Are you going to pick the guns and enlist to fight US imperialistic wars or you are only tough when you are masturbating behind the monitor?

Anonymouse
Guest
Anonymouse

@Best place on meth:

"Helping protect Australia is harming Chinese interests, is it?"

Try reading the words you quoted again. Obviously they're saying that if the US uses its bases in Australia to launch attacks against Chinese interests, then those Australian facilities will be a target. The US takes the same attitude towards other countries. It's nothing to do with the defence of Australia.

klipsh
Guest
klipsh

@DEFAULT NAMEe

Best place on meth has a comprehension problem even with his own quotes 🙂

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