Sky High Oil Prices may be permanent
· TSX +137.54 Oil prices moving further into record territory could give the TSX another boost this week while investors look to the US Fed to further ease interest rates in an attempt to limit damage from a slowing American economy.
· Dow -42.91
· Dollar -.2c to $ $98.40US
· Oil +2.46to $118.52US per barrel growing demand and tighter supplies are likely to keep
prices high-some say as high as $200 per barrel
· Gold +$.40US to $887.20US
Bond Rates: <http://www.bankofcanada.ca/en/rates/bonds.html> http://www.bankofcanada.ca/en/rates/bonds.html
Tuesday, April 29, 2008
Financial Update
Flaherty says Canadian financial sector solid but needs can't be complacent
· TSX -18.02 closed slightly lower on profit taking
· Dow -20.11
· Dollar +.35c to $ $98.75US
· Oil +$0.23 to $118.75US per barrel
· Gold +$5.70US to $892.90US
Bond Rates: http://www.bankofcanada.ca/en/rates/bonds.html
Associated Press WASHINGTON - The Federal Reserve is poised to deliver another interest rate cut to millions of people and businesses this week, although that could be the last break they get for a while.
Fed Chairman Ben Bernanke and his colleagues open a two-day meeting Tuesday to take a fresh pulse on the economy and decide their next move on interest rates. The Fed is widely expected to lower its key interest rate by one-quarter percentage point to two per cent at the end of its session Wednesday.
By David Friend, The Canadian Press
TORONTO - Finance Minister Jim Flaherty wants Canada's financial community to provide more disclosure about the products they offer so investors have a better understanding of the risks they face.
The economic and financial market turmoil is "less pronounced" in Canada than in the United States or Europe and the Canadian financial sector continues to be "solid," the finance minister said after a meeting with senior executives of several banks.
But all agreed that the Canadian financial sector can't be complacent, Flaherty said.
He noted that the troubles surrounding $32 billion worth of frozen Canadian non-bank asset-backed commercial paper was a topic of discussion, in the context of the necessity for a common securities regulator.
"We need to have a framework for regulation in Canada that includes the financial institutions, not just the banks," Flaherty said.
"This has a lot to do with appropriate disclosure, with making sure investors are informed with what people are attempting to sell them..."
Pensions hold the largest amounts of the money tied up in non-bank asset-backed commercial paper. But there are also about 2,000 individuals and numerous companies who also have the notes.
Some people have said their life savings are tied up in frozen ABCP and some companies have said they could face bankruptcy if they can't get access to the money that's tied up in the notes.
Many individual investors have complained they didn't understand the notes they were sold while companies have said they relied on the high ratings given to the paper.
"A lot of investors have been through an ordeal," Flaherty said.
"Most Canadians expect a degree of regulation that doesn't impede capital markets but provides adequate protection for investors. And not just investors directly, but investors who are invested in other mechanisms, through pension plans and so on."
All sides of the debate weighed in on "what the right regulatory touch will be," said Nancy Hughes Anthony, president and CEO of the Canadian Bankers Association.
The group discussed the lessons learned from the ABCP debacle, increased disclosure on the investment products and future transparency and "stress testing," she said.
"I don't think there was any conclusion today about anything specific that had to be done," she added.
"It's very positive when the decision makers from Canada's financial community can actually get in a small boardroom like this and have a good dialogue."
Scotiabank chief executive Rick Waugh said the Canadian banks are in a position of financial strength, but "can't be complacent."
"We're working together - that's one of the strengths of the Canadian system," he told reporters after the meeting.
Flaherty said the Canadian banks will establish and adopt leading practices for disclosure within 100 days, and expects the Bank of Canada to play a leadership role in some areas.
The minister said he plans to meet with the banks again "before the summer" to review their progress.
· TSX -18.02 closed slightly lower on profit taking
· Dow -20.11
· Dollar +.35c to $ $98.75US
· Oil +$0.23 to $118.75US per barrel
· Gold +$5.70US to $892.90US
Bond Rates: http://www.bankofcanada.ca/en/rates/bonds.html
Associated Press WASHINGTON - The Federal Reserve is poised to deliver another interest rate cut to millions of people and businesses this week, although that could be the last break they get for a while.
Fed Chairman Ben Bernanke and his colleagues open a two-day meeting Tuesday to take a fresh pulse on the economy and decide their next move on interest rates. The Fed is widely expected to lower its key interest rate by one-quarter percentage point to two per cent at the end of its session Wednesday.
By David Friend, The Canadian Press
TORONTO - Finance Minister Jim Flaherty wants Canada's financial community to provide more disclosure about the products they offer so investors have a better understanding of the risks they face.
The economic and financial market turmoil is "less pronounced" in Canada than in the United States or Europe and the Canadian financial sector continues to be "solid," the finance minister said after a meeting with senior executives of several banks.
But all agreed that the Canadian financial sector can't be complacent, Flaherty said.
He noted that the troubles surrounding $32 billion worth of frozen Canadian non-bank asset-backed commercial paper was a topic of discussion, in the context of the necessity for a common securities regulator.
"We need to have a framework for regulation in Canada that includes the financial institutions, not just the banks," Flaherty said.
"This has a lot to do with appropriate disclosure, with making sure investors are informed with what people are attempting to sell them..."
Pensions hold the largest amounts of the money tied up in non-bank asset-backed commercial paper. But there are also about 2,000 individuals and numerous companies who also have the notes.
Some people have said their life savings are tied up in frozen ABCP and some companies have said they could face bankruptcy if they can't get access to the money that's tied up in the notes.
Many individual investors have complained they didn't understand the notes they were sold while companies have said they relied on the high ratings given to the paper.
"A lot of investors have been through an ordeal," Flaherty said.
"Most Canadians expect a degree of regulation that doesn't impede capital markets but provides adequate protection for investors. And not just investors directly, but investors who are invested in other mechanisms, through pension plans and so on."
All sides of the debate weighed in on "what the right regulatory touch will be," said Nancy Hughes Anthony, president and CEO of the Canadian Bankers Association.
The group discussed the lessons learned from the ABCP debacle, increased disclosure on the investment products and future transparency and "stress testing," she said.
"I don't think there was any conclusion today about anything specific that had to be done," she added.
"It's very positive when the decision makers from Canada's financial community can actually get in a small boardroom like this and have a good dialogue."
Scotiabank chief executive Rick Waugh said the Canadian banks are in a position of financial strength, but "can't be complacent."
"We're working together - that's one of the strengths of the Canadian system," he told reporters after the meeting.
Flaherty said the Canadian banks will establish and adopt leading practices for disclosure within 100 days, and expects the Bank of Canada to play a leadership role in some areas.
The minister said he plans to meet with the banks again "before the summer" to review their progress.
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