Canada's finance minister on Wednesday announced plans to purchase up to an additional 50 billion Canadian dollars (about 41 billion U.S. dollars) of insured mortgage pools by the end of this fiscal year as a continuation of efforts to stabilize the lending industry.
The announcement by Finance Minister Jim Flaherty follows a similar move last month, in which Ottawa bought 25 billion Canadian dollars (about 20.5 billion U.S. dollars) in mortgages. Canada's big banks lowered their prime lending rates following the buyout.
"At a time of considerable uncertainty in global financial markets, this action will provide Canada's financial institutions with significant and stable access to longer-term funding," Flaherty said at a news briefing in Toronto.
Flaherty said the government decided to make the move upon hearing that lending markets in the country were freezing up. He said the purchase will help make loans more affordable and available for Canadian borrowers.
"This extension of the program to purchase insured mortgages will further support the availability of credit, which will benefit Canadian households, businesses and the economy," he said. "In addition, it will earn a modest rate of return for the government with no additional risk to the taxpayer."
Flaherty said the government "will not allow Canada's financial system, which has been ranked as the soundest in the world, to be put at risk by global events."
Source: Xinhua
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