CA BOC Financial System Review
It's an assessment of conditions in the financial system and potential risks to financial stability - the evidence on strains and imbalances can provide insight into the future of monetary policy;
- History
Expected Impact / Date | Description |
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May 9, 2024 | |
May 18, 2023 | |
Jun 9, 2022 | |
May 20, 2021 | |
May 14, 2020 | |
Nov 18, 2019 | |
May 16, 2019 | |
Nov 22, 2018 | |
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- CA BOC Financial System Review News
Release of the Financial Stability Report — Press conference by Governor Tiff Macklem and Carolyn Rogers, Senior Deputy Governor (11:00 (ET) approx.).
A stable and efficient financial system is essential for sustaining economic growth and raising standards of living. In the Financial Stability Report, the Bank of Canada assesses the resilience of the Canadian financial system and identifies key risks that could undermine its stability. This year, the Bank renamed its annual assessment of the stability of the Canadian financial system to the Financial Stability Report from the Financial System Review. This reflects a continuing evolution in how the Bank assesses risks to Canadian financial stability. In particular, the Report: takes more of a cross-sectoral perspective when assessing overall financial stability in Canada by accounting for interconnections among sectors in the financial system considers how financial system participants are building resilience against the risks to their sector and to the broader financial system Analysis about the structure and efficiency of the financial s post: BOC REPORT: CANADA'S FINANCIAL SYSTEM APPEARS RESILIENT; OVER THE LAST YEAR FINANCIAL SYSTEM PARTICIPANTS HAVE CONTINUED TO PROACTIVELY ADJUST TO HIGHER RATES. post: BOC REPORT: SIGNS OF FINANCIAL STRESS HAVE RISEN PRIMARILY AMONG HOUSEHOLDS WITHOUT A MORTGAGE.
Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers answer reporters’ questions following the release of the Financial System Review.
A stable and efficient financial system is essential for sustaining economic growth and raising standards of living. In the Financial System Review, the Bank of Canada identifies the key sources of concern for the financial system in Canada and explains how they have evolved over the past year. The structure of the Financial System Review is undergoing a series of changes to more clearly communicate the risks to financial stability. For 2023, the Bank is no longer discussing financial system vulnerabilities and risks separately; these are now combined under several key areas of concern. This approach reduces repetition, improves readability and allows for a more concise and direct analysis of the nature and level of risk. In short, it allows the Bank to take a more deliberate look at what could go wrong and what the implications would be for financial stability. Another key change is removing from the publication the discussion of issues related to the efficiency of the financial system. These issues will be covered through regular postings to post at 10:03am: Bank Of Canada’s FSR: Recession Could Mean 'Sizable' Mortgage Losses For Banks -Recent Homebuyers Show Greater Signs Of Financial Stress -Regional Bank Turmoil Had Limited Spillover
A stable and efficient financial system is essential for sustaining economic growth and raising living standards. In the Financial System Review, the Bank of Canada identifies the main vulnerabilities for and risks in the financial system in Canada and explain how they have evolved over the past year. The Canadian financial system has proved resilient throughout the COVID‑19 pandemic, and the balance sheets of businesses and households are generally in good shape. However, in an environment of tightening financial conditions, high global inflation and increased geopolitical tensions, financial system vulnerabilities have become more complex, and risks have become more elevated. The Bank is paying particular attention to the fact that a greater number of Canadian households are carrying high levels of mortgage debt. These households are more vulnerable to declines in income and rising interest rates. While the sharp increase in house prices over the past year has resulted in significant equity gains for many households, those who entered the housing market in the last year or so would be more exposed in the event of a significant pric post at 10:00am: BOC: GLOBAL MONETARY POLICY TIGHTENING WILL PUT THE FINANCIAL SYSTEM'S RESILIENCE TO THE TEST AND MAY EXACERBATE CURRENT FINANCIAL VULNERABILITIES. post at 10:01am: BOC: SOME CANADIANS WHO TOOK OUT MORTGAGES IN 2020 AND 2021 COULD SEE MONTHLY PAYMENTS JUMP BY 45% IN 2025-26 AS RATES RISE post at 10:03am: BOC: VULNERABILITY ASSOCIATED WITH ELEVATED HOUSE PRICES INCREASED FURTHER OVER IN THE PAST YEAR, EVIDENCE IMPLIES OVERALL PROPORTION OF HIGHLY INDEBTED HOUSEHOLDS WILL LIKELY SURPASSED ITS PRE-PANDEMIC PEAK IN 2021. post at 10:03am: BOC: WE ARE PAYING PARTICULAR ATTENTION TO THE FACT THAT A GREATER NUMBER OF CANADIAN HOUSEHOLDS ARE CARRYING HIGH LEVELS OF MORTGAGE DEBT.
post at 11:54am: *BOC'S MACKLEM SAYS THERE IS A RISK THAT THE RUN-UP OF INFLATION IS MORE PERSISTENT THAN WE EXPECTED : post at 11:58am: BOC'S GOV. MACKLEM: WE WOULD TAKE IT VERY SERIOUSLY IF INFLATION RATES WERE TO BECOME UNHINGED.
Good morning. Thank you for joining me to discuss the latest issue of the Bank of Canada’s Financial System Review (FSR), which we published today. The purpose of the FSR is to identify and explain key vulnerabilities of the Canadian financial system. Vulnerabilities need not lead to serious problems. Some work themselves out before anything bad happens. But the lesson from history is that if left unchecked, financial vulnerabilities can lead to calamities— either because they amplify negative shocks, making bad situations worse, or because they become sources of instability on their own. We assess vulnerabilities with two aims in mind. The first is better risk management. By identifying vulnerabilities and outlining how they could lead to bad outcomes, we hope to raise awareness and understanding. The better that households, the private sector, financial authorities and governments understand the vulnerabilities of the financial system, the better able they are to manage and defuse them. But risk can never be eliminated. Shocks are by their nature unpredictable, so sometimes a bad shock or series of shocks will hit us before a vulnerability has been managed down. This leads to the second aim: better crisis management. Effective contingency plans can greatly reduce the impact of a calamity if one materializes. And the better understood vulnerabilities are across the financial system, the better prepared we can all be. The analysis showcased in the FSR underpins our assessments of the priorities for strengthening risk management and crisis preparedness. For the past 14 months, a very extreme event—the COVID-19 pandemic—has affected people’s health and economic well-being unlike anything we have seen before. A year ago, we used the FSR to provide analysis of the early impacts of the pandemic on the Canadian financial system. The current FSR looks at how things have evolved and highlights short- and medium-term issues of concern. I’d like to take a few minutes before answering your questions to touch on three themes from the FSR: our collective resilience, the need for continued vigilance, and the imperative to think ahead and act now on key medium-term vulnerabilities. The Canadian financial system went into thi post at 11:04am: #BoC 's Macklem: It is important to understand recent rapid rise in home prices are not normal. Increased issuance of mortgages with high loan-to-income ratrios is of most concern. $CAD post at 11:05am: BOC'S GOV. MACKLEM: INTEREST RATES ARE EXCEPTIONALLY LOW. post at 11:17am: BOC'S GOV. MACKLEM: BECAUSE INTEREST RATES ARE VERY LOW, THERE IS ROOM FOR THEM TO RISE. post at 11:18am: BOC'S GOV. MACKLEM: THE ECONOMY AS A WHOLE REQUIRES OUR ASSISTANCE AND WEAKNESS IN CERTAIN SECTORS IS CAUSING INFLATION TO FALL.
Governor Tiff Macklem answers reporters’ questions following the release of the 2021 Financial System Review.
Released on May 9, 2024 |
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Released on May 18, 2023 |
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Released on Jun 9, 2022 |
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Released on May 20, 2021 |
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