CANADA Prepared to Increase Money Supply
 

Lending rate near zero

KEVIN CARMICHAEL
Globe and Mail Update
March 3, 2009 at 11:20 AM EST

As most economists expected, the central bank cut its overnight lending rate by half a percentage point to 0.5 per cent, the lowest ever, prompting the country's biggest lenders to quickly match, dropping their prime rates to 2.5 per cent.

The surprise in Tuesday's statement was the declaration that Governor Mark Carney and his advisers on the governing council are preparing the ground for a program of “credit and quantitative easing.”

Such an effort would pump money into Canada's financial system by giving banks and others a new buyer for assets such as government bonds and corporate debt. The Bank of Canada's current credit-market programs are different because they only offer short-term loans, taking banks' paper assets as collateral.

The Bank of Japan already is buying company debt, and the U.S. Federal Reserve and the Bank of England are considering similar plans because some markets for credit remain unusually tight more than a year into the financial crisis.

Complete article: http://business.theglobeandmail.com/.../Business/home

Re: CANADA Prepared to Increase Money Supply
 

I wish the credit card companies would drop their interest rates, and give people a chance to catch up on their detbs. Better they do this, than have people default.