Canadian Banks May Ignore Future Rate Cuts

Posted on January 17, 2008 at 12:11 pm
Filed Under Financial Markets, Mortgage Planning

Bloomberg recently confirmed that many of the major Canadian banks are seriously considering ignoring the upcoming potential rate cut by the Bank of Canada.

TD Chief Economist Don Drummond said that “Toronto-Dominion Bank and other lenders may not match an expected interest-rate cut by the Bank of Canada next week.” If this decision were to hold true, this could seriously undermine the policy makers ability to revive our Canadian economy based on the slowdown in the United States. Drummond goes on to say “The reality is that there’s nothing given by law that we have to match the bank’s rate, and our prime should be related to our costs”. Wow.

Your Take-Away: There is no question that this decision could play a serious role in the overall strength of our economy. After all, if the major Canadian banks are more concerned with protecting their own pockets and not as much concerned with the Canadian economy as a whole, that could leave a deep scar in the mind of both the Canadian Consumer and even the Bank of Canada.

Now more then ever, we as Canadians need to be educating ourselves on what is happening around us so we can be best prepared to handle the issues we are and will be forced to deal with.

Until next time, have a Terrific Thursday!

Chris & Elisseos

Bookmark to: