Access to financing in Canada is under pressure despite an increased volume of business lending, a senior official at the federal finance ministry said on Tuesday. Tiff Macklem, an associate deputy minister of finance, told a parliamentary finance committee that Canada's banking sector has not been hit as hard as banks in other countries.
"But in spite of the strengths of our system, there is no question that dislocations in global credit markets have put pressure on access to financing in Canada," he said. "While the volume of business lending continues to rise, the terms and conditions available to borrowers have tightened and some credit-worthy borrowers are finding it difficult to access credit." Macklem said the nonbank sector of the financial system was cutting back on lending very rapidly while other participants, such as foreign banks, have also pulled back.
"A lot of the most dramatic problems are outside the Canadian banks. We've seen foreign banks pull back, some foreign banks have closed securitization markets are scaling back," he said. "And so that's bringing a lot of people that were dealing with nonbanks, foreign banks, or in securitized markets, they're coming to the (Canadian) banks," he said.
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