Bank of Canada sees higher perceived risk to financial system
OTTAWA (Reuters) - The overall perceived risk to the Canadian financial system has increased slightly over the last six months but confidence in its resilience remains high, the Bank of Canada said on Wednesday.
A six-monthly central bank survey of risk management professionals showed that 44 percent felt the chances of a high-impact event had grown slightly while 50 percent saw no change.
Compared to the last survey, respondents perceived a higher chance of the global economic outlook deteriorating and also fretted about a reduction in market liquidity, the bank said.
The Bank of Canada has raised interest rates five times in the last 16 months as the economy strengthens and says it is paying close attention to how people with debts are coping with higher repayments every month.
About a quarter of those polled in the financial systems survey said a 150- to 200 basis point rise in Canadian five-year interest rates over a 12-month period could trigger adverse events like a house price correction or a large increase in household defaults.
Reporting by David Ljunggren, editing by Dale Smith
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