Prime rates are rising again

Good morning! In this week’s newsletter, the big banks follow the Bank of Canada in hiking rates, Jake Edmiston reports on a vertical farm’s big fundraising round and the FT interviews SBF on what went wrong at FTX.

— Joe Hood, Managing Editor, Financial Post

Banks hike prime rates, yet again

Canada’s big banks were quick to follow the Bank of Canada’s 50-basis-point policy rate hike yesterday, boosting their prime rates across the board. That is sure to increase the squeeze on households who have seen borrowing costs spike dramatically this year. Prime rates are now around 6.45 per cent, but as Stephanie Hughes reported, there was some good news yesterday, too. The central bank opened the door to a pause in the hiking cycle, changing the language in its forward guidance. The higher rates come just a week after banks reported choppy earnings that were dragged down by higher credit loss provisions and in some cases, slowing loan growth.

AN END IN SIGHT?

ICYMI: Read Stephanie Hughes’ coverage of BMO, CIBC and TD earnings

Vertical farm GoodLeaf seeing green after $150M investing round

Vertical farming is one of the future-of-food trends that has real potential in Canada and other colder-climate countries. This week, one of the leaders in the space, Guelph-based GoodLeaf Farms, showed that it could emerge as a true national champion in the sector. As Jake Edmiston reported, french-fry empire McCain Foods Ltd. and the agriculture investing arm of Quebec insurance giant Power Corp. are among the investors in a $150-million financing round that will help the leafy green producer expand from its established market of Ontario into Alberta and Quebec. And the company doesn’t appear content with dominating the domestic lettuce landscape: if things go well, CEO Barry Murchie told Edmiston, expanding the model globally is on the agenda.

GROWING UP

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‘I f***ed up big and people got hurt’

Sam Bankman-Fried’s US$32 billion crypto empire has collapsed, but is he to blame? The man himself has been exhibiting some serious contrition in recent interviews, including one on the weekend with the Financial Times, in which he acknowledged he “f***ed up” in a variety of ways but reiterated that there was no deliberate wrongdoing, just significant lapses in oversight and judgment. Those included a deeper involvement with Alameda Research, the trading arm of FTX, than previously disclosed. Hedge fund titan Bill Ackman is among those who appear to be willing to give SBF at least the benefit of the doubt. Others have speculated that the case could ultimately lead to criminal charges. Either way, it appears likely that SBF will go down as the poster boy for everything wrong with crypto. At least until the next one comes along.

SBF OPENS UP TO THE FT

More: FTX held talks with Taylor Swift over US$100-million sponsorship deal 

Thousands of businesses that received CEWS may not have been eligible: auditor general

Canada’s biggest pension fund ends crypto investment pursuit: sources

Big banks brace for a downturn that hasn’t fully arrived

Goldman Sachs CEO warns about smaller bonuses, job cuts on uncertain outlook 

CIBC to appeal New York court’s ruling in Cerberus lawsuit

Canadian bank bonuses rise 1.9% as firms look past slowdown

Toronto home prices fall as sales decline 49% in November

The FP Finance Newsletter was compiled by FP Managing Editor Joe Hood. Reporters Barbara Shecter and Stephanie Hughes go where the action is. Designer Gigi Suhanic made it look great and web editors Pamela Heaven, Victoria Wells and Noella Ovid contributed at every step along the way.

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