In its annual report on financial stability, the Bank of Canada (BOC) said that the commercial war with the USA Threatens the Canadian economy and raises risks to financial stability, according to Reuters.
Key aspects
“In extreme circumstances, market volatility could become market dysfunction.”
“Canada’s financial system is resistant; banks are well positioned to deal with a stress period.”
“The main short -term concern is the risk of a disorderly mass sale in the market; in an extreme crisis, the authorities could have to provide liquidity.”
“A severe and lasting global commercial war could push the mortgageal delinquency rate beyond the levels seen in 2008-09.”
“If there were credit breaches of households and large -scale companies, banks could see greater losses than they have provided.”
“In a stress period, coverage funds could find more difficult to maintain their presence in the Canada government markets.”
“The Bank of Canada is less concerned about the impact of the high costs of indebtedness on the capacity of debt service that a year ago.”
“More than 90% of mortgage holders with 5 -year fixed rate mortgages should be able to make higher payments.”
“Credit losses could lead to banks to reduce credit and this could aggravate an economic recession.”
“Credit availability and conditions for the financing and liquidity of the market are also being observed.”
“The indicators of financial stress and evidence of precautionary behavior by the participants of the financial system will be observed closely.”
Market reaction
The USD/CAD did not show immediate reaction to this publication and was last won 0.25% in the day to 1,3872.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
