CIBC chief exec supports new housing measures

CIBC chief exec supports new housing measures

CIBC chief exec supports new housing measures The head official of one of Canada’s largest banks expressed his support for the new federal measures announced by the Finance Minister last week.

CIBC president and CEO Victor Dodig said that the “prudent” regulatory changes—which included steps to restrict the influx of foreign capital, along with tighter eligibility rules on would-be borrowers—will help reinforce the country’s real estate sector against various risks.

“`It's always a balancing act making sure that the housing market and the construction sector stay robust and employment stays robust, making sure that the banks continue to lend prudently and that consumers are borrowing prudently,” Dodig told The Canadian Press. “I think it's a prudent measure to continue to make sure there's stability in the system.”

Dodig also voiced his optimism regarding the upcoming consultations on “lender risk sharing”, which might see banks take on a larger portion of the risks in mortgage defaults.

“It's been a hallmark for us to always work together,” Dodig said. “I think the goal of the government is to make sure that the taxpayer is not on the hook to support financial institutions in a perceived or real way.”

On October 12, Finance Minister Bill Morneau said that the potential long-term gains outweigh the new rules’ effects on at-risk segments such as first-time home buyers.

“We think those impacts will be relatively short-term in nature, we think they'll be relatively modest and will contribute to a longer, positive growth pattern for the country,” Morneau assured.
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  • Geoff Lander 2016-10-17 10:01:49 AM
    Anyone else find it curious that all of the big banks seem to support the changes while the mortgage brokerage industry has expressed serious concern based on a more realistic view of the actual fall out of the changes? hmmm.....
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  • Ron Butler 2016-10-17 3:39:49 PM
    The truth is the banks have more to worry about in a housing market reversal, let's face it: they hold the mortgages. The stress test at 4.64% is a very necessary evil. The phrase that bugs me is: "make sure the tax payer is not on the hook to support financial institutions" but it is okay for the taxpayer to support Automakers and Bombardier and green energy, on and on and actually LOSE money in some cases but when it comes to mortgage insurance when all that has ever happened for 4 decades is that money has been made for the tax payer and massive reserves established against any future claims.

    I am not suggesting that governments should not take serious action to correct a housing bubbles but let's not pretend a system of mortgage bulk insurance that has worked flawlessly so far is way too risky to continue. The insurers own internal stress tests prove their reserves are more than adequate so could it be a bank CEO who is encouraging the end of bulk insurance may actually have his own agenda.
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