22 October 2008

Banks pare prime lending rates

The following article is excerpted from the 22 October 2008 edition of the “Toronto Star”.

Canada's big banks passed on the full value of the Bank of Canada's quarter percentage point interest rate cut yesterday….

The rate cut announcement and the bank's gloomy outlook pushed the sagging Canadian dollar and stocks dramatically lower.

Canada's big banks followed suit late in the day, cutting their prime lending rates, the basis for many loans, to 4 per cent….

The move avoids the controversy sparked after the last rate cut, when most banks passed on just part of the benefit to customers and agreed to pass on the rest only after Ottawa announced it would buy $25 billion worth of mortgages from them to ease their cost of borrowing….