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Poll finds 90% believe chartered banks should be required to cut interest rates by the full amount of cuts approved by the Bank of Canada.
Ottawa (28 May 2009) - A new national poll has found that 90% of Canadians want the federal government to require chartered banks to reduce interest rates by the full amount of any cuts approved by the Bank of Canada.
Conducted by Vector Research and Development Inc., the findings indicate a strong public mood in favor of tighter regulations for the chartered banks.
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There was no significant difference in the response among the supporters of all federal political parties. All felt overwhelmingly that the chartered banks should be required to adjust rates by the full amount of any reductions set by the central bank.
The question asked in the poll was:
As you may know, the Bank of Canada controls the country's money supply and lends funds to the commercial banks people use for their saving, chequing accounts and loans. To stimulate the economy the Bank of Canada has cut interest rates several times.
But Canadian banks have not passed on the interest rate cut in full to their customers who want to buy a house, a car, a business or anything else that would require a loan.
In your opinion, should the government require the banks to pass on these interest rate cuts to borrowers, or don't you think so?
The responses by party were: NDP 93% Yes, (7% No); Conservative 88% (12%), Liberal 91% (9%), Bloc Québécois 88% (12%) and Green 82% (18%).
The poll was conducted online between April 30 and May 12. It included responses from 1,017 adults from across the country.
Dragging their feet
The National Union of Public and General Employees (NUPGE) has pointed out that the federal government is using taxpayer borrowing power to buy up to $125 billion Canadian mortgage securities held by the banks.
"That’s good for the banks," the union notes. "However, while the banks are basking in the benefits from government protection and taxpayer support, they’re not doing enough to help families and businesses get through the current economic crisis."
The Bank of Canada has slashed its interest rate (the rate it charges banks to borrow from them) to almost zero - just 0.5% in an effort to get the economy moving by getting the banks to start lending again.
"Shockingly the big banks continue to drag their feet," NUPGE notes. "They simply will not pass on the full degree of interest rate cuts to families and businesses. Some banks have even raised the rate they charge on loans and lines of credit. Recently the banks reported big profits and multi-million dollar bonuses for executives. Why do the banks care more about their profits and bonuses than helping us get through this recession by reducing mortgage, business and personal lending rates? The results of this recent survey show that Canadians agree."
NUPGE
The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE
More information:
Facts and Insights - The role of the banks