Bank of Canada finds the nation’s new lending quality improvements

By tarvicn vicn

The Bank of Canada has reported a rise in quality in the country’s new lending system.

Canada’s central bank has released a research paper on 14 November highlighting the decline in consumer debt.

The reduced rate of “deeply indebted borrowers” has been attributed to spending adjustments made in response to stricter mortgage rules and increased interest rates.

The bank also claims that credit growth has moderated and household vulnerabilities have grown smaller.

“The number of new highly indebted borrowers has fallen, and overall mortgage activity has slowed significantly,” the report reads.


“Tighter policies around mortgage qualification and higher interest rates are having a direct effect on the quality and quantity of credit.”

“The most-pronounced decline has been in the number of new mortgages extended to highly indebted borrowers, which fell by 39 per cent year-over-year in the second quarter of 2018.”

The report was co-authored by Olga Bilyk and Maria teNyenhuis, both bank staffers.

Interest rates have expanded by five times as much since the summer of last year.

“It took a long time for that vulnerability to accumulate and it’s going to take some time for it to diminish,” said Carolyn Wilkins, Senior Deputy Governor at the Bank of Canada.


Featured Articles

People over profit is steering business in a new direction

An unsettling few years has resulted in more and more companies hiring Chief People Officers to implement a culture that prioritises employee wellbeing

Databricks: The phenomenal rise of a data and AI heavyweight

Founded a decade ago, Databricks is on a mission to help data teams solve the world’s toughest problems using tools including its Lakehouse Platform

Business Chief expands portfolio with new look and coverage

Business Chief US & Canada launches with fresh new look and extended coverage of the region, with exclusive executive interviews, opinions and insights

Google at 25: The remarkable rise of a technology colossus

Technology & AI

Mind the Gap – fashion retailer Uniqlo targets US market

Corporate Finance

Meet Manish Sharma, the new CEO of Accenture North America

Leadership & Strategy