Did the Canadian government offer a bank bailout to Canadian banks?
I don’t consider this to be a bailout, and it would be inaccurate to classify these mortgages as “risky.” These mortgages were already guaranteed by the CMHC, making this a virtually risk-free endeavour. Traditionally the banks would have sold these mortgages to other banks. Because of the financial crisis, interbank lending has all but stopped. The intention then is to free up the bank’s cash so they can continue to lend to consumers. It also ensures the banks continue to be competitive on a global perspective in light of the ‘real’ bank bailouts that have been occurring around the world.
