Money: High global debt top concern: Bank of Canada - PressFrom - Canada

MoneyHigh global debt top concern: Bank of Canada

07:05  15 march  2019
07:05  15 march  2019 Source:

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The BIS, a "central bank of central banks " that evaluates risks to the global financial system on a quarterly basis, singled out China, Hong Kong and Canada as The level of all Canadian private debt outside the financial sector is 9.6 per cent higher than normal in Canada , just above nine-per-cent

The Bank of Canada governor can talk all day about household debt and how a global recession would The central bank warned Canadians in June that the country’s interconnected banks are It pointed to eight high -profile cyberattacks on banks in 2016, including an US-million heist at the

High global debt top concern: Bank of Canada© Provided by The Bank of Canada is seen in Ottawa on May 30, 2018. TD Securities is predicting the Bank of Canada will keep its key interest rate on hold through to the end of next year. The forecast builds on the firm's forecast last week that the central bank would not hike its key interest rate target this year. THE CANADIAN PRESS/Sean Kilpatrick

OTTAWA - The Bank of Canada's senior deputy governor says an explosion of global debt over the last decade is a top concern that she argues is holding back economic growth and creating vulnerabilities in the world's financial system.

The global financial system is in better shape than it was in 2007 before the financial crisis, but unknowns such as ongoing U.S.-China trade tensions could knock things off course, Carolyn Wilkins said in a speech Thursday in Vancouver.

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This Year. The Bank of Canada ’s Overnight Lending Rate sets the benchmark for borrowing money 2. Low Inflation and High Debt Levels Still Top Worries. In October, the Bank revised its forecasted While the Bank ’s rate announcements always factor in the effects of unstable global markets, this

The Canadian government debt , commonly called the "public debt " or the "national debt ", is the amount of money owed by the Government of Canada to holders of Canadian Treasury security. In 2014, this number stood at CAD.4 trillion across federal and provincial governments.

Wilkins also warned that high debt loads usually become an "amplifying factor" when it comes to an economic downturn.

The U.S.-China trade war and expanding global geopolitical unrest have been key worries for the Bank of Canada, she noted.

"The global development that concerns me the most, though, is rising debt," Wilkins said in her speech at an event hosted by the University of British Columbia's economics department and CFA Society Vancouver.

"Whether you're a homeowner or a business person, you know first hand that high leverage can leave you in a vulnerable financial position. It's no different for economies.

"The world has learned this lesson the hard way on many occasions in my lifetime."

She said the combined global debt owed by governments, businesses and households now amounts to US$240 trillion, which is US$100 trillion higher than just before the financial crisis and more than three times the world's gross domestic product.

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Debt loads tied to overheated Canadian housing markets are making households more vulnerable, but on the whole Canada 's economy is resilient enough to withstand any major shocks to the system, the Bank of Canada says. Bank cites Toronto and Vancouver prices, but says crash is unlikely and

Bank of Canada – The central bank of Canada established in March 1935. Canadian Imperial Bank of Commerce (CIBC) – One of the top five banks in Canada . Citi operates in Canada through the Citibank, Citi Cards Canada , CitiFinancial, Citigroup Global Markets, Citigroup Fund Services and Citi

Government debt, she added, has "skyrocketed" over the past 10 years, while corporate borrowing has "exploded" and now displays some risky qualities.

But some debt can be a good thing, she said.

For instance, Wilkins said limited accumulation of public-sector debt can help stimulate economic growth, depending on how it's used, and companies can borrow as a way to invest in expanding their capacity.

Debt levels around the world piled higher largely because of the long stretch of extremely low borrowing rates that was necessary to help global growth build fresh momentum, she said.

"The downturn would have been even deeper and more painful without these decisive policy responses," Wilkins said.

"What strikes me, though, is how much overall leverage has grown globally, even as the financial sector has repaired its books."

Canada's high household debt, which is now more than 178 per cent of disposable income, is the central bank's top domestic financial vulnerability, she said.

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That is because high debt levels can make us vulnerable to negative events—individuals as well the In part, this reflected a global trend toward lower inflation and interest rates. But it also reflected the At the Bank of Canada , we have been watching these debt levels closely because of the growing

This is a quick overview of top 10 banks in Canada , their structure & financial status including Toronto-Dominion Bank , Royal Bank of Canada , Bank of Nova Scotia etc. Even if there’s a tepid economic growth in Canada , the Canadian banks are performing quite well. These highly rated banks are also

"The good news for Canadian businesses and households is that the financial system — globally and here at home — is safer than it was a decade ago thanks to much stronger safeguards," she said.

Wilkins added it's important for policy-makers around the world to continue efforts to conduct stress tests on different parts of the financial system, and, when necessary, put in safeguards.

Canadian Dollar Headed For A Tumble As Economy Weakens, Analysts Predict.
If you've got shopping you were planning to do abroad, now may be a better time than later. A growing number of analysts are predicting that the Canadian dollar will take a dive this year, pushed downwards by a weaker-than-expected economy, with one analyst predicting it will match record lows. Analysts at TD Securities recently predicted the loonie would trade in the 71-cent to 74-cent U.S. range this year. It was trading at 75.3 cents U.S. as of Tuesday morning. "Prospects for Canadian dollar have shifted considerably to the downside over the medium-term," foreign exchange strategist Mazen Issa wrote, as quoted at CBC.

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