BOC's Wilkins - does not comment on need for interest rate hikes

Author: Eamonn Sheridan | Category: Central Banks

Bank of Canada Senior Deputy Governor Wilkins speech

Headlines via Reuters  from the text of Wilkins' speech (bolding is mine)
  • high global debt makes Canada, rest of world vulnerable to another period of financial instability
  • trade war between US and China, growing geopolitical unrest are top of mind for bank; rising global debt "concerns me the most"
  • "no one gains and everyone loses" in trade wars; end to US tariffs on steel and aluminum would be a welcome relief
  • global financial system in a better place than in 2007, but uncertainties like trade tensions could "throw us off track"; high leverage an amplifying factor
  • high household debt is "our number one domestic financial vulnerability"; Canada does not have same debt quality issues that u.s. had before 2008 crisis
  • public debt in certain euro area countries a concern, those with weak fundamentals more prone to distress
  • US and Japan make up largest share of public debt in advanced economies, but their debt poses less of a worry
  • non-financial corporate debt poses a financial stability risk for China, could flow to Canada through lower demand for exports, lower commodity prices, turbulence to global financial markets
  • investment funds, exchange-traded funds a concern because "we don't know how these funds will react when an adverse shock hits"
  • more needs to be done to stress test new players in the system, including asset managers and non-bank financial institutions
  • China taking action on more stringent regulation, financial sector supervision, but trade conflict makes "delicate balancing act" for authorities tougher
  • a stable debt-to-GDP ratio does not guarantee financial stability; credible macroeconomic framework critical to maintaining faith in government creditworthiness, achieving growth
  • makes no mention of need for future interest rate hikes

 Bank ofCanada Senior Deputy Governor Wilkins speech

By continuing to browse our site you agree to our use of cookies, revised Privacy Notice and Terms of Service. More information about cookiesClose