Canada strengthens its banks: mirror's US and Europe

Canadian banks

will be reinforced by its government guaranteeing its loans it was announced on Thursday, after the global financial crisis was forecast to send Canada to the brink of recession.

Jim Flaherty, Canada’s Finance Minister told reporters: “The government of Canada is acting today to ensure that financial institutions in this country are not put at a competitive disadvantage when raising funds in wholesale markets to lend to consumers and businesses”.

As markets around the world are crushed and have plunged consumer confidents to a drastically low level, government around the world have had to act including Canada, although, according to the World Economic Forum as the soundest banking system in the world.

Next month World leaders are set to meet in Washington to discuss the deepening global economic misery, with European leaders wanting an overhaul of world financial systems regulation.

The program to bolster the Canadian banking system will start in November allowing backstopping banking lending and will continue for six months, although the Canadian Finance Minister does not think the program will be necessary for most Canadian banks.

Source: reuters