Canadian economy 'very strong,' Harper says
Last Updated: Tuesday, August 21, 2007 | 5:30 PM ET
CBC News
Canada's economy remains strong, in spite of the turbulence that has roiled financial markets recently, Prime Minister Stephen Harper said Tuesday.
"I can assure you that the position of the Canadian financial sector, in particularly our banks, Canadian companies in general and the household sector, our capital positions are very strong," he said at a news conference wrapping up the North American summit at Montebello, Que.
They were Harper's first public comments on the volatility in the stock markets that has followed a worldwide credit crunch.
His remarks echoed similar comments Monday from Finance Minister Jim Flaherty, who said Canada's strong economy would be able to deal with any fallout from the credit crunch.
Harper called the recent market gyrations "not unusual."
Delinquencies in the U.S. subprime mortgage market have led to a general tightening of lending criteria and sparked fears of a liquidity crisis when some issuers of short-term corporate debt found it difficult or impossible to find buyers to assume any risk.
In the past two weeks, the Bank of Canada, the U.S. Federal Reserve, the European Central Bank, and the Bank of Japan have intervened in the financial markets by injecting more than $100 billion to boost liquidity.
Bank CEOs issue joint statement
On Tuesday morning, the CEOs of the six biggest Canadian banks held a conference call and later issued a joint statement affirming their commitment to ensure the health of markets for their corporate loan products.
"This commitment is backed by the banks' strong capital positions, reflects their confidence in the quality of the underlying assets and is supported by their ongoing commitment to provide liquidity for bank-sponsored [asset-backed commercial paper] on maturity," the banks said.
The Bank of Canada issued a statement praising the chartered banks' communiqué, calling it "a further positive step to help re-establish well functioning money markets in Canada."
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