Unlike the US banks, Canadian banks hold back on dropping rates
Colin on October 8th, 2008
The Canadian banks choose to rebel against the Government of Canada direction to reduce interest rates. The Central Bank dropped rates by a half percentage point indicating concern about the economy and in an attempt to ease credit. However the Canadian Banks are choosing to keep 50% of the drop for themselves. Story at the Globe and Mail.
Banks trim prime but lag BoC cut | Globe and Mail
OTTAWA — Major Canadian banks said they would lower their prime rates by just a quarter of a percentage point, refusing to pass along all of the Bank of Canada’s half-point decline.
The rebellious move is a departure from the past, when the big banks have fully matched central bank rate cuts, despite complaints they couldn’t really afford it.
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