The problem was definately 'relaxed' lending rules in the US and a number of other countries. It affects Canadian banks because financial systems are so integrated now. Inter bank lending has ground to a halt because nobody knows who is left holding 'the bag'.

Even though Canadian banks were not willing/able to participate in the lending frenzie of the last few years, the were able to buy securities that were bundled with junk loans. Thanks to all these new financial products banks have no idea of who is holding what at this point. If in doubt, trust nobody.


Fred

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Blujays1: Spending Fred's money one bottle at a time, no two... Oh crap!