Concerns amid banking turmoil in U.S. are magnified in Canada given higher debt levels: Strategist
Canada’s finance minister stressed Monday that the country’s financial institutions are set up to weather the chaos roiling the banking world.
“We have strong institutions, and we have a financial system that has proven its strength time and again,” Chrystia Freeland said in a Monday speech.
“Our financial institutions have the capital they need to weather periods of turbulence.”
She made the comments in Oshawa, Ont., after Sunday night’s news that USB would buy the beleaguered Credit Suisse Group AG, narrowly avoiding a meltdown at the Swiss lender that many feared could spread to other banks and potentially lead to a snowballing financial crisis.
The Credit Suisse saga followed the closure of Silicon Valley Bank in the U.S. earlier this month, and added to concerns about instability in the banking world.
Freeland said Monday that prudent risk management is “a hallmark of Canadian banks,” and a guiding principle for financial regulators. She said Canada is monitoring the financial situation and talking with allies.
“Canadians can and should be confident that at a time of global uncertainty, there is no better place to be than Canada,” she said.
Freeland spoke just over a week before the federal Liberal government is set to introduce its annual budget. She promised “fiscal restraint” along with targeted aid for Canadians hit hardest by high inflation.
She also referenced a previously announced health-care spending plan and “clean economy” spending on things such as electric vehicle batteries and mining for critical minerals.