Comments from the Bank of Canada's financial system review
- In a future shock, a drop in house prices and incomes would reduce spending, could possibly put stress on financial system
- Increase in mortgage debt has exceeded declines in consumer debt
- We're concerned now that people may be buying homes because they expect prices to keep climbing
- Potential demand for liquidity in bond market is growing faster than what banks can supply in times of high stress
- BOC analysis indicates it would take a very large and persistant shock to impair lending from major banks
- Full report
The financial system review is the BOC's document where they outline and assess vulnerabilities. It's not meant to signal monetary policy changes.
Macklem will hold a press conference at 1500 GMT (11 am ET).
The review came with a little video:
