BoC hints at mortgage tightening

BoC hints at mortgage tightening

BoC hints at mortgage tightening The Bank of Canada believes regulation and supervision – not monetary policy – are the keys to aiding economic recovery. Is this a hint at further housing finance tightening?
 
“We have made it clear that household imbalances are at the top of our list of vulnerabilities. But monetary policy is not the primary tool to address these risks,” Carolyn Wilkins, senior deputy governor for the Bank of Canada said in a speech Monday. “Regulation and supervision, along with targeted macroprudential actions, are more effective lines of defence.”
 
While Wilkins doesn’t outright point to mortgage rule tightening, her footnotes following a statement that “defences have been strengthened a number of times since 2008” point to exactly that sort of tinkering.
 
“The Minister of Finance has tightened mortgage insurance rules, the Superintendent of Financial Institutions has developed stronger mortgage underwriting principles and the Canada Mortgage and Housing Corporation has improved its programs,” the footnote and the end of the speech transcript reads.
 
This, however, follows Finance Minister Joe Oliver’s statement that the government will not make any rash decisions when it comes to reining in the housing market.
 
“We’re looking at things, but we’re not going to be doing anything dramatic,” Oliver said in an interview in Cairns, Australia on Friday, according to the Financial Post. “We don’t see the need for it.”
 
Wilkins’ speech was given about the underwhelming economic recovery seen since the 2008 recession.
 
“Our approach is to consider the main sources of uncertainty in our deliberations on how best to achieve our inflation target,” Wilkins said. “This helps us avoid making big errors that are difficult to correct.”
9 Comments
  • Lisa Holly 2014-09-23 1:14:00 PM
    Financing guidelines are tighter than I have seen in 24 years of lending.

    Why not take a look at credit card debt first and limit those interest rates, give the public a bit of breathing room and a break from the mortgage lending nightmare we have experienced since 2008.

    We all need a break.

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  • Janice Ashworth 2014-09-23 2:26:32 PM
    I agree with Holly. The government needs to take a thorough look at Credit Card rates and limits. I personally had 3 credit cards from one institution that started with $5000 limits and were automatically increased to total credit available of over $100,000 at 18% or higher. This is a much bigger problem than our mortgage standards. Most people pay their mortgage before their credit cards when times get tough.
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  • John Van Driel 2014-09-23 2:45:24 PM
    Absolutely agree with the two ladies above. Where are CAAMP and IMBA when it comes to representing us to the Government Agencies who seem to be ignoring rampant credit card indulgency!!
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