Today there is good and bad news.
The good news came from a StatsCan report about all of the household debt in Canada that many experts have been complaining about – how Canadians have been accused of being bad money managers but guess what? This report confirms that we are not broke and precariously dangling from a cliff of troublesome household debt, but quite the opposite. Canadians have significant assets to back all of the debt – and more. There is a net-worth surplus.
As published recently by the Vancouver Sun, a former chief economic analyst for Stats Can, Philip Cross, revealed that two-thirds of the $1.8 trillion in household debt were mortgages.
Finally someone agrees with what I’ve been saying for many years.
Further, Statistics Canada’s National Balance Sheet Accounts show there was a net worth of $8.2 billion for Canadian households if you subtract the $10 trillion of assets from $1.8 trillion of liabilities.
The bad news is this. Bank fraud is back.
According to a recent publication from Washington DC, four of the world’s biggest banks, JPMorgan Chase, Citigroup, Barclays and the Royal Bank of Scotland have pleaded guilty to criminal wrongdoing – rigging and manipulating the currency markets.
The guilty banks will pay a combined $2.5 billion US in criminal penalties for manipulation of currency rates between 2007 and 2013. The Federal Reserve slapped them with an additional $1.6 billion US in fines. Britain’s Barclays will be paying an additional $1.3 billion to British and U.S. regulators.
Unfortunately no interruption in currency market business occurred and no executives were criminally or civilly charged.
It was this kind of institutional fraud in the financial sector that caused the world-wide financial collapse in 2007-08 less than 10 years ago. How could this happen again? Even worse, is this a premonition that history will be repeating itself?
I’ve been arguing for a very long time that not just has the debt been different in Canada but also our institutional banking practices have not been riddled with criminality. Hopefully the United States will follow our example.