“This amount may seem high,” Henri-Paul Rousseau told the Committee on Public Finance of the National Assembly of Québec. “Moreover, it is correct to say that, in dollar terms, the Caisse is the investor that holds the most third-party ABCP in Canada. But as a percentage of its equity, if we compare it to those who have disclosed their positions to date, the Caisse is the least exposed.”

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Of the $13.2 billion, the Caisse's exposure to subprime debt is slightly less than $1 billion.

Currently, the provisions taken by the large international banks represent from 30% to 50% of their subprime exposure.

“Assuming a provision as high as 50%, for the Caisse that would mean a provision of $500 million,” he explained. “Such a provision would have an impact of 30 basis points on the Caisse's return, or 0.3%, which is not likely to affect the financial equilibrium of the Caisse and its depositors.”

He added that the remaining $12.2 billion consists of assets of very good quality, as confirmed by J.P. Morgan, the adviser to the pan-Canadian investors committee overseeing the ABCP restructuring led byPurdy Crawford.

“We will obviously have to wait until year-end to measure precisely the impact of the markets and the Caisse's investment decisions in 2007 but I remain confident about this matter,” Rousseau said.

The committee expects to have the problem resolved by Dec. 14.

To comment on this story, email craig.sebastiano@rci.rogers.com.