Canada: Focus on BoC Financial System Review – BMO CM

The Bank of Canada’s semi-annual Financial System Review will outline the key systemic risks facing the Canadian financial system, suggests Benjamin Reitzes, Canadian Rates & Macro Strategist at BMO Capital Markets.

Key Quotes

“Look for household indebtedness and housing to again be listed as key vulnerabilities. There’s much more uncertainty around the outlook for both of these after the BoC’s 50 bps in hikes and the coming OSFI mortgage rule changes. That’s especially the case with the Greater Golden Horseshoe still working through the impact of the Ontario government’s Fair Housing Plan. We’ll be looking for the Bank of Canada to provide a bit more clarity on how many households could be impacted by the new OSFI measures (e.g., how many households were stretching to the limit to purchase a home).”