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<span style="font-weight: bold">High household debt a risk to financial system: Bank of Canada</span>
TORONTO, Dec. 10 (Xinhua) -- Rising levels of household debt would emerge as the most prominent risk to Canada's financial stability despite improving financial conditions, the Bank of Canada warned Thursday.
In its semi-annual "Financial System Review" report, the central bank illustrated and assessed five key risks to the country's financial system. Among them, household debt was the only increased risk, while the other four were either unchanged or decreased.
According to the central bank, the ratio of household debt to income has climbed to "historically" high levels of more than 140 percent.
The threat triggered by surging household balance sheets has increased, which, according to analysts, is a direct consequence of the central bank keeping its benchmark interest rate at near zero, or 0.25 percent, in an effort to stimulate the economy after the economic slowdown.
Besides household debt, deteriorating budget balances worldwide would be another prominent risk to the Canadian financial system over the next few years, said the bank report, adding that "the bank projects a more subdued global recovery than in previous cycles."
The central bank's review aims to assess the downside risks that could cause stress in the financial markets, even if they are low-probability events, according to the bank.
TORONTO, Dec. 10 (Xinhua) -- Rising levels of household debt would emerge as the most prominent risk to Canada's financial stability despite improving financial conditions, the Bank of Canada warned Thursday.
In its semi-annual "Financial System Review" report, the central bank illustrated and assessed five key risks to the country's financial system. Among them, household debt was the only increased risk, while the other four were either unchanged or decreased.
According to the central bank, the ratio of household debt to income has climbed to "historically" high levels of more than 140 percent.
The threat triggered by surging household balance sheets has increased, which, according to analysts, is a direct consequence of the central bank keeping its benchmark interest rate at near zero, or 0.25 percent, in an effort to stimulate the economy after the economic slowdown.
Besides household debt, deteriorating budget balances worldwide would be another prominent risk to the Canadian financial system over the next few years, said the bank report, adding that "the bank projects a more subdued global recovery than in previous cycles."
The central bank's review aims to assess the downside risks that could cause stress in the financial markets, even if they are low-probability events, according to the bank.