A former Canadian finance minister believes the Liberal government could have done a better job of easing investors’ concerns when a crisis of confidence engulfed Home Capital Group in late April.  

“As minister of finance – if I may say – I think I would have wanted to send out a signal not about the specific regulation in that company, but a signal that every depositor who has $100,000 or less is not at risk of losing their capital,” Joe Oliver told BNN in an interview on Monday.

The Canada Deposit Insurance Corporation insures deposits up to a limit of $100,000. However, that guarantee did little to stem a run on deposits at Home Capital after the Ontario Securities Commission alleged the lender and three of its former executives misled investors about falsified mortgage applications in 2015. A preliminary settlement agreement was reached on that matter earlier this month.

“I don’t think it was conveyed at all, in fact,” Oliver said, “Because there were a lot of people - as I understand it – who took out their money, even though they had less than $100,000. I think messages of calm based on the facts are important in a situation like that when you have a loss of investor confidence that may be partly rational, partly irrational.”

Oliver – who served as finance minister under Stephen Harper between March 2014 and November 2015 - has taken on a new role as non-executive chairman at Echelon Wealth Partners, helping independent financial services firms address issues including regulatory policy and capital formation challenges.

Home Capital was thrown a lifeline last week by Warren Buffett when Berkshire Hathaway announced it would provide a $2-billion line of credit to aid in the lender’s strategic review process.

The Ministry of Finance expressed satisfaction afterward, telling BNN by email the federal government “is pleased to see Home Capital’s funding issues being addressed by market participants.”

Oliver believes that the ministry’s role is not to intervene in crises like Home Capital’s but to be more concerned with systemic risk.

“The federal government is concerned about systemic risk. Its public policy responsibilities are somewhat different than the [Ontario Securities Commission], which is concerned about investor protection first,” Oliver told BNN. “That’s why you have – at OSFI and at the OSC – somewhat different objectives and therefore somewhat different approaches.”

“We didn’t need intervention, but words of calm that explained to people what the laws currently are, I think, is not government intervention. It’s part of the role that (the Ministry of) Finance is supposed to play.”