Canadian Economists Applaud Takeover of US Mortgage Firms

By Bruce on September 12, 2008 8:16 AM in Mortgages in Canada | | Comments (0)

There is some good news emerging from the recent US government takeover of mortgage firms Fannie Mae and Freddie Mac. BMO, Royal Bank of Canada (RBC) and TD all praised the move.Speaking to The Globe and Mail, BMO CEO Bill Downe stated that the move is good for global capital markets.

He believes that the takeover may help clear the "...storm cloud hanging over global markets."RBC economist Paul Ferley told the Canadian Press that he believes the rescue of Fannie and Freddie will help free up mortgage funds and "ease some of the downside risks to growth in that economy."

With troubles in the US economy being the main threat to Canadian growth, the move to strengthen the two mortgage lenders will have a positive impact on the US economy and, in turn, the Canadian export market.TD economist Eric Lascelles agreed with Ferley that there will be some small positives to the Canadian economy.

He cites both the tangible benefits felt in export markets like lumber, and intangibles, like the positive psychological impact the intervention is likely to have on consumers.

GET A FREE QUOTE