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Finance Minister Jim Flaherty responds to a question during question period in the House of Commons on Parliament Hill in Ottawa on Thursday, May 2, 2013. Flaherty says Canada's housing market is unfolding in a healthy manner and has no plans to intervene.While some observers are expressing fears the bubble is about the burst, Flaherty says the market is responding the way he envisioned when he tightened lending rules last year.
Finance Minister Jim Flaherty responds to a question during question period in the House of Commons on Parliament Hill in Ottawa on Thursday, May 2, 2013. Flaherty says Canada's housing market is unfolding in a healthy manner and has no plans to intervene.While some observers are expressing fears the bubble is about the burst, Flaherty says the market is responding the way he envisioned when he tightened lending rules last year.
(Sean Kilpatrick/CP)

DAVE MORRIS

Flaherty’s real estate interventions trump Bernanke’s market tweaks

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Even a free market cheerleader like the late Milton Friedman acknowledged that the government should take a role in setting monetary conditions. A new working paper published by the U.S. Federal Reserve, however, finds in its preliminary research that not all interventions are created equal. The report observes that, while some instances of regulatory credit tightening have reduced consumer debt growth, loosening of credit conditions appears to be much less effective as a policy tool. Canadian Finance Minister Jim Flaherty will be pleased to hear that; Fed chairman Ben Bernanke, not so much.