The impact of the financial crisis in Canada

There’s no missing it: the global financial crisis is on everybody’s mind and creates a lot of worries. Over the last few weeks, there have been multiple bankruptcies among banks (mainly in the U.S. and Europe), major market corrections, vigorous government action, a lowering of key interest rates and a host of unconventional measures on the part of central banks. Nothing works and the effects of the crisis on credit terms just heighten the risks of a recession everywhere on the planet. Of course, Canada is not immune to this sluggish climate. The Economic Viewpoint shows that even if the economic outlook has darkened, Canada benefits from noticeable advantages. Generally Canadian financial institutions are in an enviable financial position and the risks of a major correction in real estate prices remain limited. In these conditions, Canadians need to keep a cool head, which does not mean that they shouldn’t be asking themselves if their investment strategy is still right.

THE FINANCIAL CRISIS IS ROCKING THE PLANET
Even if the U. S. is at the root of the current financial crisis, all financial markets are being affected by it. Stock indexes have lost a lot of ground over the last few weeks, federal bond rates are falling and most currencies are depreciating against the U.S. dollar. Despite the adoption by the Senate and the House of Representatives of the U.S. bailout plan, uncertainty remains as problems in financial institutions cross U.S. borders, particularly into Europe. In addition, worries are now focused on the consequences of this financial crisis and the economic outlook for the United States and the rest of the world. So in these circumstances, what are the impacts for Canada?

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