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(The Year 2012 In Review)
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|User Info||Tickerguy Is (Again) Right -- Canada; entered at 2012-02-24 19:11:46|
40% of the residential RE loans in Canada are essentially callable on an overnight basis, so if there is a liquidity problem, the bank can immediately liquidate the collateral and defend the rest of their portfolios.
Hm... what happens to 'liquidity' if Canadian banks actually did this to a significant number of borrowers? Methinks the borrowers wouldn't be able to come up with the money (I think that's a safe bet), and the banks would end up holding a bunch of rapidly-diminishing assets (foreclosed homes in a deflating market.)
How exactly would that mitigate Canadian banks' liquidity problems?
Last modified: 2012-02-24 19:15:39 by bsfootprint