Can you please tell me why the World Economic Forum rated our banking system the soundest on the planet two weeks ago?
Obviously they were in error, because you're "backstopping" them to make sure they aren't put at a "competitive disadvantage".
Obviously they were in error, because you're "backstopping" them to make sure they aren't put at a "competitive disadvantage".
I know things are moving quickly, but have our banks somehow pissed away the hundreds of billions of dollars in profits they've made over the past decade in two short weeks? Is this program "temporary" like income tax, the GST, the fuel surtax, and so on? And "no charge to taxpayers?" How does that work, exactly?
And while I'm at it, if I may be so bold, what are banks competing with, exactly? They take our money (charging us for the privilege), and invest it--and I must say they've done rather well at that--making lots and lots of money for themselves, granting their customers piddly to nonexistent interest rates, and then dinging them whether they take money out (service charge, ch-ching!) or not (inactive account charge, ch-ching!) Where does the competition come in? Are all the world's banks competing to see who can gouge their clients the most?
Yours sincerely, and most confusedly,
Ken Breadner
2 comments:
Ken,
This article explains it a bit better:
http://lfpress.ca/newsstand/News/CanadaWorld/2008/10/23/7176686.html
Its not about insuring the banks, its about insuring the transactions with potential troubled financial institutions.
The important aspect is, the banks have to buy the insurance from the government. As with any insurance provider, as long as the insurance payments exceed the payouts, the government will make money from this.
It appears to be a necessary (and prudent) step.
Thanks, I wish I had read that a little more closely. I do hope that the government's got competent enough actuaries to properly affix the correct premiums!
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