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Uhh...quote:Manulife Bank has reversed its move to cut the mortgage rates it offers homebuyers after a rebuke from the federal finance ministry, The Globe and Mail has learned. This seems wildly, wildly inappropriate.
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Mar 19, 2013 19:00
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Helsing posted:Why? I have a pretty big problem with the minister's office calling up a bank on a whim and telling them that their interest rates are too low. When the government intervenes in the economy, I feel it should be rules based, transparently, and in a way that renders the government accountable for its actions. When the minister of Finance calls a bank and asks them to raise their mortgage rate, there's actually no legal authority behind it. He doesn't have the power to dictate what banks charge. So, what, there's an implied threat to legislate or take other action? It's really sketchy, and it doesn't seem like how a real country governs itself. In this case, it's the minister telling a bank that it has to charge more money for its product, not less, leaving home-buyers worse off. I don't know why anyone would support the minister doing this. Pinterest Mom fucked around with this message at 23:57 on Mar 19, 2013 |
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Mar 19, 2013 23:40
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The government doesn't interfere in the day to day running of the bank, but it does set its broad orientations. Changing the mandate (currently: keep annual inflation between 1 and 3%) of the Bank is a Really Big loving Deal, but it can be done. We've only had the current mandate for 22 years, so you can imagine a future (probably NDP) government changing it, but it's not something that's done on a whim. Ultimately, the Bank is wholly owned by the Ministry of Finance so the government can do whatever it wants with it, it's just really imprudent for governments to politicise central banking. The Bank of England only became independent from the government under Tony Blair, in an amazing fact.
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Mar 21, 2013 00:53
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