Canadian Bank Regulator Tightens Credit, As The Household Debt Risk Emerges Again
Despite rainbows and unicorns, Canadian household debt problems didn’t just disappear. In fact, they got worse in many cases, and the economy is finally strong enough to start thinking about them. The Office of the Superintendent of Financial Institutions (OSFI), the country’s bank regulator, announced the domestic stability buffer (DSB) will rise in October.
The buffer had been lowered at the start of the pandemic, to allow banks to lend more freely. This flooded the economy with hundreds of billions in additional lending capacity. Now that the economy is recovering faster than expected, OSFI is raising the buffer again. Concerns of debt vulnerability returned so fast, they raised the DSB to the highest level. Yes, even higher than it was before the pandemic.
Article Written By: Stephen Punwasi
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