VICTORIA, British Columbia (Reuters) - Prime Minister Stephen Harper promised on Wednesday that major governments and central banks would take more action in a bid to quell the growing financial crisis.
Harper was speaking shortly after the Bank of Canada cut interest rates in co-ordination with other central banks.
“We have, all through this, continued to take actions, and I can assure you there will be more actions,” he told a Conservative Party campaign rally in Victoria ahead of the October 14 election.
“These are market-based actions, they’re not policy decisions of the government involving taxing and spending, they’re actions in the marketplace involving trading to assist liquidity and credit in markets. Governments, central banks and others will take these actions when they view it as appropriate,” he said.
The Bank of Canada -- in an unexpected move -- cut its main overnight rate by 50 basis points to 2,50 percent. Harper said Canada had no choice but to act with its partners abroad.
“To a large degree, some of these movements we’re seeing in stock markets and the banking system are way beyond the control of certainly (not only) our government, but of any government, so obviously central banks and others have to act in concert,” he said.
Harper, under increasing pressure to show he understands the concerns of the public as stock markets plunge, said the rate cut “will provide timely and significant support to the Canadian economy”.
He brushed off criticism that he had effectively telegraphed the rate cut by saying on Tuesday that further action would be taken.
He also said Canada backed calls for an emergency summit of leaders from the Group of Seven leading industrialized nations to work out a response to the global banking crisis.
Canadian Finance Minister Jim Flaherty will attend a meeting of G7 ministers and central bank heads this weekend in Washington.
Harper, who repeatedly stresses the country’s financial system is sound, said Flaherty would make the point to his counterparts that they should follow Canada’s example on mortgages.
“He will convey our belief that other nations should adopt our mortgage rules in Canada, which effectively do not allow people to purchase houses that they simply cannot afford,” he said.
“We don’t have the subprime mortgage issue we see south of the border due to more prudent, conservative lending practices.”
Harper has urged Canadians to look to the long term and not to panic as the market swings up and down. Polls suggest he will retain power in next week’s general election, but only with another minority Conservative government.
Reporting by David Ljunggren; editing by Rob Wilson