Canadian CEOs have strong opinions about who’s to blame for the U.S. real-estate crash that triggered the recession — and how to get the global economy back on track. In a recent Compas Inc. poll that asked CEOs and business leaders who was to blame for the U.S. real-estate bubble, most respondents pointed the finger at America’s major financial institutions for making investment decisions that were too risky. (The mean score was 6.3 on a seven-point scale, where seven means strongly agree.) “The main problem arose from financial institutions believing property values can still rise indefinitely, even though our manufacturing is shrinking,” commented one CEO. “Why should we support financial misjudgment while these same groups demand zero errors from borrowers?” To a lesser extent, the respondents blamed Congress (a mean score of 5.5) and the Federal Reserve (a mean score of 4.3).
The execs also weighed in on some of the ideas currently being debated to boost the global economy, including those discussed at the recent G20 meeting in St. Andrews, Scotland. For example, Brazil recently called for China to float its currency, the yuan, which has been pegged at about 6.8 per U.S. dollar for more than a year. The issue also resonated with Canadian CEOs. With a mean score of 5.6, they agreed that the International Monetary Fund, the United States and other countries should keep pressuring China to float the yuan.
CEOs also agreed that legislation in the U.S. offering tax breaks to small businesses would help boost the economy — respondents supported the legislation with a mean score of 5.3. Meanwhile, the executives in the poll expressed opposition to the “TobinTax” on currency transactions proposed by British Prime Minister Gordon Brown. When asked if they agreed with Canadian Finance Minister Jim Flaherty’s opposition to the tax, the respondents’ mean score was 4.5. And CEOs were evenly split on the issue of Canadian interest rates. With a mean score of 3.5, some felt that the rates were too low — potentially fuelling a real-estate bubble — while others strongly disagreed.