Flaherty sees start of credit squeeze

Mon Oct 6, 2008 3:19pm EDT
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OTTAWA (Reuters) - The global credit crunch is starting to hamper Canadian banks' ability to raise longer-term funds but they remain well-capitalized and able to withstand big shocks, Finance Minister Jim Flaherty said on Monday.

In a statement in apparent reaction to the drop on Canadian and world stock markets, Flaherty said Canada's mortgage system was sound and did not have the large subprime sector that has afflicted the United States.

"Nonetheless, Canada's financial system is not immune to the ongoing turmoil in global credit markets," he said. "The government of Canada stands ready to take whatever actions may be necessary to protect the stability of the Canadian financial sector."

(Reporting by Randall Palmer; editing by Rob Wilson)

<p>Finance Minister Jim Flaherty listens to a question while speaking to journalists in the foyer of the House of Commons on Parliament Hill in Ottawa June 5, 2008. REUTERS/Chris Wattie</p>