Canadian Banks Cut Lending September 1st, 2009
The banks of Canada are tightening their strings when it comes to providing credit, loans and financing for companies and individual households. The banks have become concerned with the losses they are accruing as more people are filing bankruptcy, as well as a rise in the number of foreclosures. Vancouver are fairing a bit better than some of the others in the different provinces, but this will affect the entire country, and the lives of many people.
The banks are feeling the pressure of those losses as well. The problem, that some financial analysts are predicting is that this could serve to enhance the problems that are already existing in the weakened economy. This kind of action could prove disastrous for the entire economy, and create more problems for the banks and the financial institutions. The banks have already began to cutting their rates of lending and this has raised concerns that the global recession is getting worse, that it is deteriorating at a more far reaching and at a deeper level that was previously thought. The council governing the banks has not idea yet, as to when the lending levels may return to normal.
What is also of concerns in Canada, is just how far reaching the effects will be due to the current financial and economic crisis in the United States. The States may affect the banks and the individual households of the Canadian people. This is coming at a time when employment is falling and the many people are already accruing large amounts of debt. So far the household lending has not been as restrictive as that for the corporations, but the banks claim if the situation worsens, more people may default on their loans and end up in foreclosure. In that situation, the banks would cut lending and credit extensions even further.
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