Working notes, observations, links and other errata from a parliamentary bureau reporter in Ottawa, Canada
Jim Flaherty, 1949-2014
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“Canada was alone among advanced industrialized economies after the 2008-09 fiscal [obviously “financial” was meant] crisis in that no Canadian bank needed a bail-out by its government.” Mr Flaherty had many accomplishments as Finance Minister but one can’t say this about him. Australia did not have any bank bailouts in the financial crisis, and was, in fact, the only advanced country in the G-20 that didn’t have a recession during this period. Neither did New Zealand, which has not had to bail out a bank since the National Government had to recapitalize the Bank of New Zealand in 1990.
This superior performance of the Antipodes is due at least in part to both the Reserve Bank of Australia and the Reserve Bank of New Zealand targeting consumer price series with a net acquisitions approach to owner-occupied housing. Five months from now all countries in the European Economic Area must publish similar series on a quarterly basis, preparatory to the European Central Bank moving to such an inflation indicator. Unfortunately, both Mr. Flaherty and Mark Carney, who was appointed Governor of the Bank of Canada while Mr. Flaherty was Finance Minister, made no changes in the target inflation indicator in the 2011 renewal of the inflation control agreement, nor were any other reforms made in the antiquated inflation-targeting mechanisms of the central bank. Enacting such reforms will be one of the biggest tasks of Finance Minister Oliver and Governor Poloz going forward.
“Canada was alone among advanced industrialized economies after the 2008-09 fiscal [obviously “financial” was meant] crisis in that no Canadian bank needed a bail-out by its government.” Mr Flaherty had many accomplishments as Finance Minister but one can’t say this about him. Australia did not have any bank bailouts in the financial crisis, and was, in fact, the only advanced country in the G-20 that didn’t have a recession during this period. Neither did New Zealand, which has not had to bail out a bank since the National Government had to recapitalize the Bank of New Zealand in 1990.
This superior performance of the Antipodes is due at least in part to both the Reserve Bank of Australia and the Reserve Bank of New Zealand targeting consumer price series with a net acquisitions approach to owner-occupied housing. Five months from now all countries in the European Economic Area must publish similar series on a quarterly basis, preparatory to the European Central Bank moving to such an inflation indicator. Unfortunately, both Mr. Flaherty and Mark Carney, who was appointed Governor of the Bank of Canada while Mr. Flaherty was Finance Minister, made no changes in the target inflation indicator in the 2011 renewal of the inflation control agreement, nor were any other reforms made in the antiquated inflation-targeting mechanisms of the central bank. Enacting such reforms will be one of the biggest tasks of Finance Minister Oliver and Governor Poloz going forward.