Also interesting is whether the money was a loan or a trade. I think if you stare at this long enough, you realize that most loans can be understood as trades. I think what it comes down to for people is the degree of risk. So solvency bailouts are usually riskier than liquidity bailouts, and this fact is important when you don’t want the government to be seen supporting, yes *supporting*, businesses or banks.

I think you’re right to point to the regulation and oversight of banks and markets as one of the political motivators around this mystery.

I think one of Gordon’s main concerns is that many folks read the media headlines and not the actually report and thought that the government gave money away for free. He thinks, in other words, that the report does more harm than good – which is not clear to me.

If there is no standard definition, then the bailout is a judgement call based on what would have happened to Canadian banks at the height of the financial meltdown. As you pointed out, financial writers seem to have no issue calling this a bailout, including this piece http://ow.ly/aHQmf

The CCPA report is a good antidote to the triumphalism displayed by the banks, and the bonuses they awarded themselves in 2009 knowing that government support saved their skins.

From what I can tell, taxpayer support of the banks was crucial to their performance, was a good program. And this is not a pure market transaction. Banks operate with less caution and less liquidity because they know that the government and taxpayer are the lender of last resort (which happened in Canada in 2008). So, to say that the government made money/not as helping define a bailout is also problematic. Of course, the lender of last resort is expected to make money. In the real world, the lenders of last resort are pay day companies, and we know what they extract from you on a bailout!

The “secret” part is a bit more interesting. Of course, most details of the program were available, but what is the overwhelming media narrative? Canada was awesome, the banks did super well, everyone came out smelling of roses. This was not true. The banks were in a lot of trouble. Well designed regulation (opposed by the banks, remember) and a good government program (yes!) “saved” (the precise degree of the save is not knowable because banking is not linear or science-based). So, I wouldn’t use the word “secret”. But really, this invalidates the entire report?

The opposition to this is mostly political and cultural, though “analysts” who pretend to have no biases whatsoever wouldn’t agree. The CCPA over-reached a little bit in the press release (hello, science news cycle! http://www.phdcomics.com/comics/archive.php?comicid=1174) and in their overuse of the word “secret”. But the report stands up well.

Thanks for writing this, needed to be said.