Canada's Banks Welcome Federal Government Move to Level International Playing Field With Inter-Bank Loan Insurance

TORONTO, ONTARIO, Oct 23 (MARKET WIRE) --
The Canadian Bankers Association welcomed the announcement today that the
federal government will create the Canadian Lenders Assurance Facility to
provide temporary loan insurance for inter-bank borrowing by Canadian
banks.

"Canada's banks are well capitalized and financially sound with or
without this federal government loan insurance," said Nancy Hughes
Anthony, president and CEO of the Canadian Bankers Association.
"Governments around the world have guaranteed loans between banks and our
federal government has recognized that, without a similar move in Canada,
our strong banks could find it more difficult to compete for loans on the
international market, which ultimately could affect borrowing for
consumers and businesses."

Canada's banks are well managed and well regulated and have largely
avoided the financial problems that have impacted some banks in other
countries. Canadian banks have been prudent lenders, avoiding the
sub-prime mortgage loans that were popular in the United States, and were
also the first in the world to adopt the advanced approaches to risk
management under the new international Basel II capital framework.

"Our banks stand head and shoulders above the rest in terms of
responsible lending practices and prudent management and this has allowed
them to weather this storm better than most," said Ms. Hughes Anthony.
"But the difficulties in global credit markets are the result of problems
that originated outside of Canada. We are not immune to the impacts of
that turbulence, although Canada's banks are in a far better position to
deal with these new realities than others have been."

A recent World Economic Forum report found that Canada's banking system
is the most sound in the world.(1) The International Monetary Fund also
found that: "The Canadian financial sector is among the world's most
highly developed. The institutions, markets, infrastructure, safety nets,
and oversight arrangements that comprise the system are sophisticated."(2)

The Canadian Bankers Association works on behalf of 51 domestic chartered
banks, foreign bank subsidiaries and foreign bank branches operating in
Canada and their 257,000 employees to advocate for efficient and
effective public policies governing banks and to promote an understanding
of the banking industry and its importance to Canadians and the Canadian
economy.

(1) World Economic Forum, "Global Competitiveness Report 2008-2009",
October 2, 2008, page 456.

(2) International Monetary Fund, "Canada: Financial System Stability
Assessment - Update", February 2008, page 6.

Contacts:
Canadian Bankers Association
Andrew Addison
(416) 362-6093 Ext. 220 or Cell: (416) 587-7733
Email: aaddison@cba.ca

Copyright 2008, Market Wire, All rights reserved.

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