Will the Insured Mortgage Purchase Program continue?
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23/02/2010 8:00:00 AM
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With reports the federal government will cut a number of its initiatives aimed to help banks through the financial crisis in next week's budget, there is talk about whether the $125-billion Insured Mortgage Purchase Program will continue.
The program, which aims to increase liquidity by allowing the government to purchase insured mortgages from banks, is set to expire in March. A story in the Globe and Mail said while bank interest has dwindled - only $66 billion worth of mortgages have been purchased - some bankers are arguing it should remain as a safeguard
"It eased a lot of funding stress," for the banks, Peter Routledge, an analyst at Moody's told the Globe. "I don't think it hurts the system to have it as a potential outlet if something unforeseen happens."
Boris Bozic, president of Merix Financial, echoed that sentiment in CMP late last year.
"It's really an insurance policy because the reverse option has been undersubscribed for some time now," he said.
The Globe reported banks only sold $1.4 billion out of a potential $4 billion worth of mortgages to the government at the latest IMPP auction held last week. One more auction is set for March 24.
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Jerry Charlton on
25 Feb 2010 09:49 AM
If our banks are so great why are we shovelling money through the back door to them? And do you think they are selling the Grade A stuff to us or the toxic crap.