Sunday, January 31, 2010

"I knew there was going to be a banking crisis"

In a Financial Times article singing the praises of Canadian banking regulation (Re-run that sentence in your head, swirl it around and enjoy it.) Paul Martin claims foresight in retrospect.
For Martin and Dodge, there was a shared conviction, as Martin told me, that “we could never afford to go through with our banks what we went through with our trust system. I knew there was going to be a banking crisis and so did everyone else who has read any history. I just wanted to be damn sure that when a crisis occurred it wouldn’t occur in Canada.”
And yes quite a lot of people did see it coming and yes, some of the economic management strategies of the Martin years like forcing banks to keep a much higher asset to leverage ratio and denying the big merger requests seem signs of foresight now.

But it's a telling insiders moment, revealing that behind the scenes of sunny triumphalism and blandly confident globalist corporatism in the 90's was an understanding among the elites that the edge of the precipice was crumbling.

2 comments:

Lizt. said...

I am glad they were regulated and Harper at the time, screamed against regulation of the Banks. Now he takes the credit!

JAMES said...

There was a lot of pressure from the right saying that our banks needed to get bigger or they would lose their way. They wouldn't compete in the world. They way they slag Paul Martin now you would think the global financial meltdown was his fault.

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