Vachon: I do remember getting a call from Mark Carney who was pretty worried and said, ‘Somebody just cut off some American banks. Was it you?’ I said, ‘No, it’s not us.’ So clearly Mark was very sensitive to the issue of keeping reciprocity between the different institutions. Don’t cut off the Americans, therefore they won’t cut you off.
De Bever: The bank came to us, Carney called me and said, ‘Look, we understand your difficulty, but you should know that as a last resort, if you need cash, we will treat you just like a bank in terms of being able to repo assets so that you can have the cash to continue.’
Dickson: The ability to get together at the most senior levels with staff also at the table, on short notice and face-to-face, was a real advantage that Canada had over other countries. Ottawa is a small town and this has benefits.
Waugh: I was very concerned, but my conclusion always was that we’re going to be fine – we being Canada, and the Canadian banks.
But the central bank could only do so much to lift confidence as the economy deteriorates. The TSX ends the year below 9,000, down 30 per cent since the collapse of Lehman.
Leech: There are not many people around here who have ever been through something like this. … I can remember looks from people sort of like, ‘Is the world going to be okay?’ Because these are young people who grew up only in a bull market. ... They’d never seen it go down.
Nixon: Chuck [Winograd, the head of RBC’s investment bank] and Mark [Standish, now co-CEO of the investment bank] … would come up to my office with regular updates, and I remember thinking it was painful every time Chuck came up because you knew the news was never going to get better. It was only going to get worse. So every update, it was: ‘Things are continuing to spiral out of control.’ There was no light at the end of the tunnel.
Denison: We lost 18.6 per cent [in that fiscal year] … That’s billions and billions and billions of dollars. It’s well over a $100-billion fund, so you do the math… We were heavily criticized for our performance during the period, including on the floor of Parliament by leaders of the opposition parties and other commentators. So this wasn’t unnoticed; it’s the largest fund in Canada, 18 million peoples’ money.
Nixon: It was the scariest period in my history by a huge margin. I lived through the crash of ’87. Credit cycles. The technology crash. … They all paled in comparison.
Amid the loss of confidence, companies start racing to find new money to protect themselves against a severe downturn. TransCanada Corp. is the first to test the Canadian equity market in late November, raising just over $1-billion. Manulife Financial Corp. soon follows, as do five major banks. However, they do this at a steep cost: All are selling new shares at rock-bottom prices that hadn’t been seen in years.
Downe: Everyone was looking with suspicion at every other participant in the market. I think that also influenced our view at the end of 2008 that we ought to issue equity as a precaution.
Guloien: There’s nothing worse than being part of a management team that raised equity at $19 in 2008, and having the stock not at that level [today]. Shareholders trust that they’re helping you out with a problem, but expect to get a return on that.
Flaherty: [Referring to calls he had with bank CEOs] A couple of them were really scared.
Waugh: I didn’t tell my wife until after the fact, but I doubled my own personal holdings in Bank of Nova Scotia at $33 [a share].
Leech: It was a tumultuous year as my first year as CEO. … I remember saying to Mark Carney on one of the phone calls, the two of us commiserating that David Dodge and Claude Lamoureux were much smarter than we were [for retiring early in the crisis.]