Canada triples mortgage purchases to boost credit

Wed Nov 12, 2008 8:55am EST
 
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TORONTO (Reuters) - The Canadian government will triple to C$75 billion ($70 billion) the amount of insured mortgages it will buy from banks to improve the availability of long-term credit, Finance Minister Jim Flaherty said on Wednesday.

The government will also reduce the base commercial pricing of the Canadian Lenders Assurance Facility by 25 basis points and will also waive the 25-basis-point across-the-board surcharge for insurance provided under the facility until further notice, he said in a statement.

The Office of the Superintendent of Financial Institutions announced on Tuesday an increase in the allowable limit of innovative and preferred shares in Tier 1 capital, he said.

The statement also said the Bank of Canada will continue to provide exceptional liquidity to the Canadian financial system as long as conditions warrant.

(Reporting by John McCrank, writing by Randall Palmer)