eNewsHound

The Canadian Banks have put stricter limits on the on the amount of money they are lending out to homeowners and small businesses, as well as tightening the reigns on the extensions of credit.  This is the result of the last few years of the not only the Canadian recession, the United States recession as well as the current global economic crisis.

 In a time when the media states that the economic situation is getting better, many citizens in the United States and in Canada are still being laid off, losing their income, falling behind and defaulting on their mortgage loans, and heading for foreclosures.  Toronto and Ottawa have taken steps to attempt to help homeowners with their financial stresses and needs, as well as many cities throughout the rest of the country.  However, the current reaction of the Canadian banks could serve to exacerbate the problems, and create a cycle that is difficult to break. 

There seems to so many mixed reports, those stating that the financial outlook is positive combined with the increasing number of foreclosures and bankruptcy filings, it just is hard to understand.  The current unemployment rate in Canada is not falling, and as the pressure grows on individual households due to lack of income, so does the pressure grow for the banks.  They are becoming concerned with their quality of credit and loan capabilities and their deteriorating portfolios. 

The Canadian economy stayed ahead of the other countries of the world for a long time, but now they are considered to be in the middle of a recession that will most likely last for at least twelve months, and will most certainly cause the number of defaulted bank loans to increase.  And as with many other counties, the government has devised a stimulus package that has the main focus on the demands domestically, while monitoring the effects of the slowdown in the global economy.

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