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Asset Backed Commercial Paper - $36.5 million "illegal" Loss

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February 08, 2008 – Comments (0)

Since the market melt down last summer I believe Canada has $32 billion dollars "frozen," but I have not seen details of where the hits have come except the Yukon government.  The $36.5 million dollars frozen there is actually a significant amount of money when you consider the low population.  I believe it works out to about $1200/person.

The federal auditor general has found that Yukon broke its own investment laws putting the money into the abcp in the first place. 

"The Yukon's two investments, Fraser found, violated the act in that they were not guaranteed by the federal government or issued or guaranteed by a bank, or issued by a company incorporated within Canada and given the highest rating by at least two recognized security rating firms."

I understand the whole abcp was a way for banks to offload this debt without taking responsiblity for the quality of their negligent lending standards, but I wonder about the part where it wasn't rated by at least two security rating firms.  I thought this stuff was rated... 

 

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