Wednesday, February 12, 2014
Federal budget 2014: Ottawa plans boost for small banks
Ottawa plans to make it easier for new banks to establish themselves in the financial sector while also improving the access to funding small banks get from Canada Mortgage and Housing Corp.
The federal government says it plans to “improve the ability of new entrants and smaller banks to compete” while preserving the strength of the sector.
The 2014 Budget says the Office of the Superintendent of Financial Institutions has appointed someone to “reach out” to those small banks and trusts and deal with some of the challenges they face competing with the big banks.
Among the changes to ensure this happens, the government is promising to make sure small banks will have better access to funding from Canada Mortgage and Housing Corp. CMHC’s new allocation methodologies are being refocused so portfolio insurance and securitization programs are more accessible to smaller lenders.
“I sure hope [there’s more competition],” said Gregory Thomas, executive director of the Canadian Taxpayers Federation, in talking about the changes. “Canada could use one or two strong national credit unions.”