New mortgage regulations are the ‘right changes’—former TD head

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The recent revisions to federal mortgage rules announced by Finance Minister Bill Morneau weeks ago are exactly what the Canadian economy needs to maintain its stability, according to the former president/CEO of TD Bank.
 
Ed Clark noted that while the measures—intended to moderate overheated housing markets—were a bit overdue, they are necessary as the vitality of Canadian real estate should be treated with utmost importance, BNN reported.
 
“Four or five years ago, I proposed the very measures, which the federal government has now done, and I think we should have done those measures sooner, but it’s good that we’ve done them now,” Clark said.
 
The changes introduced include a new risk-sharing model for major banks, “stress tests” for borrowers taking on insured mortgages, and the closing up of tax loopholes for capital gains exemptions on principal residence sales.
 
Clark argued that these steps will buttress the Canadian economy against the worst effects of slow global growth and the resultant record-low interest rates.
 
“The best thing you can do is start to lean against it, like these policies, so that you don’t have an asset bubble get so big that it bursts, because when it bursts, that’s when you have a really bad situation,” he said.
 
“It’s very hard to fine-tune exactly how you lean against it, but I think we should be leaning against it; if we don’t lean against it, we’re going to create a bigger and bigger asset bubble that will create problems in the future.”

Related stories:
Latest regulatory changes will support the Canadian economy—CMHC head
New rules will pave the way for a less anxious BoC—analysts
 
  • Geoff Lander on 2016-10-21 9:19:58 AM

    Of course they're "good" changes...they are making it far more difficulty to almost impossible for monolines to compete with the big banks on a big chunk of the market. How could less competition for the big banks not be good? (For them at least...)

  • LanceH on 2016-10-21 9:48:57 AM

    Clark has exposed himself the last few years since leaving the bank as a hard-core socialist, appearing on a variety super-left panels and talk shows etc. He has no credibility in my view!

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