The Bank of Canada’s latest inspection of the financial system notes the usual structural weaknesses, or “vulnerabilities,” as the central bank prefers to call them.
Household debt still is so high that we’d be in trouble if something bad happened, such as a global trade war that crippled demand and sunk commodity prices. And real estate prices in some places are still so extreme that we could be the cause of our own downturn; house-poor consumers could stop shopping, or a sharp drop in home values might leave households with debts that exceed the value of their assets.
Still, the Bank of Canada wants us to lose only a little sleep over these scenarios.
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