Carney under fire for role in 'trusts' decision

Written by  //  December 5, 2007  //  Canada, Economy, Markets, Politics  //  No comments

Eric Beauchesne, CanWest News Service
December 05, 2007

OTTAWA — The next governor of the Bank of Canada came under fire Wednesday for his role in the Conservative government’s controversial decision to tax income trusts, which also broke one of its election promises.
… Under questioning from MPs, Carney said policy changes the central bank is looking at to ease the domestic credit crunch resulting from the fallout from the U.S. housing market meltdown are not a bailout for market players who made bad decisions.
However, he stressed that the bank doesn’t want to hurt individual Canadians just to teach market players a lesson.
Meanwhile, Carney said the medium-term challenges for the bank in conducting monetary policy come from the profound demographic changes and developments in Canadian productivity, the globalization of markets, global trade imbalances, and the pace of financial market innovation and integration.
And he also called on the International Monetary Fund, the world’s lender of last resort, to be more “frank and direct” in its assessments of the policies of individual countries and the impact their policies have on other economies, a reference to China’s refusal to allow its currency to float, a move which Canada has complained is forcing it to bear an unfair share of the burden of adjusting to the fall in the U.S. dollar. Complete story

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