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

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