Stabilizing the Trust's Position: Mark Carney's Achievements
Unveiling the Fires Behind the 2008 CDPQ Crisis: Monique Jerôme-Forget Speaks Out
Monique Jerôme-Forget, the finance whiz who navigated Quebec through the 2008 commercial paper crisis, has some burning thoughts to share regarding Mark Carney's intervention during his tenure as Governor of the Bank of Canada. These insights follow the release of an article in La Presse on May 3rd, based on Jean-Jacques Pelletier's book.
As the curtain falls on the dramatics at the Caisse de dépôt et placement du Québec (CDPQ), Monique found herself thrust onto center stage. Pelletier scrutinized the events leading to the commercial paper backed by assets (CPBA) by consulting former CDPQ President, Henri-Paul Rousseau. However, Rousseau had since jumped ship to Power Corporation, leaving it to Pierre Brunet, CDPQ's Board of Directors President, to knock on Monique's door in panic.
With a steely resolve, Monique summoned the three powerfulfigureheads - Pierre Brunet, Alban D'Amours, and Louis Vachon - to her presence. They painted a dire picture of the CDPQ's financial standing, teetering on the precipice of disaster.
The alarm bells chimed instantly as Monique relayed the urgency to David Dodge, then Governor of the Bank of Canada. It was not long before Dodge and the trio trooped to Ottawa for an emergency meeting.
The CDPQ had initially estimated its holdings in commercial paper at $8 billion. Only later, with the revelation of the leverage effect, did the figure inflate to a jaw-dropping $40 billion—almost a third of the Caisse's assets.
Mark Carney Steps In
Initially, Governor Dodge hesitated to intervene as his term was coming to an end, and his successor was none other than Mark Carney.
Monique, not one to delay action, promptly reached out to Carney, urging him to pay heed to the CDPQ's tumultuous predicament. One vivid memory that remains from this period is a tense phone call with Carney the day before a long holiday, in which they hash out ways to cushion the CDPQ's blow and buy some time to strategize.
Carney, ever the strategic thinker, offered his support for Quebec to bridge the gap, allowing the CDPQ to assess the damage and devise long-term solutions. The Montreal Agreement, a beacon of hope, materialized from this collaboration, successfully steering the CDPQ to calmer waters.
A swift side-swipe at the CDPQ: Monique, under fire for appointing Michael Sabia as head of the CDPQ, despite whispers that he was too tight-knit with Ottawa, realizes success from his tenure. Rousseau, though departed from CDPQ management, contributed an ingenious idea—forming a specialized team to decipher the enigmatic nature of the CPBA.
With Purdy Crawford, a financial powerhouse, on board, the team painstakingly analyzed the CPBA, leading to the Montreal Agreement's execution. Sabia, lauded for his remarkable turnaround, swiftly restored the CDPQ's lost assets—an accomplishment that kept Monique awake for countless nights as Quebec's financial well-being hung in the balance.
1. Weigh In: Join the conversation
Fancy yourself as a finance aficionado? Why not share your thoughts on Monique Jerôme-Forget's insights on the 2008 CDPQ crisis and Mark Carney's interference? Dive into the fray and let your passion for numbers guide your discussion!
- In light of Monique Jerôme-Forget's recent comments on the 2008 CDPQ crisis and Mark Carney's involvement, it's intriguing to discuss the role of finance and politics in shaping business decisions during times of turmoil, drawing parallels with the general-news landscape.
- The discussion on Monique Jerôme-Forget's revelations about the 2008 CDPQ crisis brings a fresh perspective to the intersection of finance, business, and politics, providing ample opportunity to speculate on potential implications for future financial crises.
