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Liberals demand review of ABCP crisis


Duncan Mavin

 

Friday, March 14, 2008

 

Liberal finance critic John McCallum has filed a notice of motion that proposes to give retail investors in Canada's asset backed commercial paper market the chance to have their complaints heard in Ottawa.

 

The notice of motion, filed Thursday, asks for hearings on the ABCP crisis, "including hearing from severely affected Canadians."

 

If the hearings take place as proposed by Mr. McCallum, they will try to find out whether regulators and other stakeholders could have done a better job in anticipating the crisis and reducing its costs.

 

The notice also asks "what action the federal government, federal regulators and other stakeholders are taking so as to reduce the likelihood of experiencing a similar crisis in the future."
Canada's $33-billion ABCP market has been frozen since last summer when investors found they could not roll over the paper as planned.

 

A group of investors, banks and lawyers working on a restructuring are due to release details of their proposals on Friday.

 

Earlier this week, the Financial Post reported that the crisis in the non-bank asset-backed commercial-paper market could be nearing an end. Sources told the Post that the committee tasked with restructuring the notes plans to file papers in an Ontario court, seeking a judge's approval to implement a restructuring package agreed to in late December. Those plans have left some small investors concerned that their interests will be steamrollered by those of much bigger players.

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