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Ottawa stepped in with a similar program during the 2008 financial crisis. The Canadian government did not buy soured mortgages, as was done in the United States. Instead, the idea is to give the big banks funding and liquidity flexibility so they could provide cash and credit to individuals and businesses, as needed, to keep the economy going.

“As insured mortgage pools in Canada already carry Government of Canada backing, there is no additional risk to taxpayers,” the statement issued late Monday said, noting that the purchased insured mortgage pools will earn a rate of return for the government that is above its own cost of borrowing.

Details of the terms of the purchase operations will be provided to lenders later this week, and will be done under a revised insured mortgage purchase program.

“During the (2008) crisis these measure were found to be very effective,” said Jason Mercer, a senior analyst at Moody’s Investors Service.

Mercer said the central bank is creating “a pretty strong arsenal” with Monday’s moves coming on top of earlier steps, including urging the big banks to suspend dividend increases and share buybacks.

What may be different this time, however, is the impact the novel coronavirus and its fallout will have on credit quality of the banks’ portfolios.

“It’s still early days,” said Mercer. “There will likely be a rise in unemployment that will cause loan defaults,” Mercer said.

While there was an increase in defaults during the 2008 financial crisis, the unemployment rate remained lower than in previous recessions, he noted.