Productivity and the Financial Sector – What’s Missing?
Canada’s financial institutions are key to solving the country’s productivity problem, according to a new report from the C.D. Howe Institute. In “Productivity and the Financial Sector – What’s Missing?” author Jeremy Kronick argues that rules and regulations governing the financial sector need to be modernized to promote innovation and productivity among banks, credit unions, […] Michael K. Feldman – The Many Benefits of Longer Mortgages
From: Michael K. Feldman To: Mortgage Policymakers Date: March 13, 2018 Re: The Many Benefits of Longer Mortgages Canadian residential mortgages could be improved if borrowers continue to have a penalty-free right of redemption at least every five years without requiring that the mortgage matures at least every five years. As I outline in my recent commentary […] The Case for Longer Mortgages: Addressing the Mismatch between Term and Amortization
Longer mortgages would benefit homebuyers and increase competition in the mortgage market, according to a new report from the C.D. Howe Institute. In “The Case for Longer Mortgages: Addressing the Mismatch between Term and Amortization” author Michael Feldman proposes a solution that would expand consumer choice, facilitate a private securitization market and reduce government mortgage […] Robson, Kronick, Hui – The Durability of the Current Expansion
From: William B.P. Robson, Jeremy M. Kronick, and Nikki Hui To: Worried Canadian Stock Market Watchers Date: February 12, 2018 Re: The durability of the current expansion A slumping stock market – the S&P/TSX index was down 10 percent from its January high mid-Friday – has prompted concerns about the broader economy. People associate ups […] Kronick And Omran – China And Australia, Lessons For Canada’s Financial Sector
From: Jeremy Kronick and Farah Omran To: François-Philippe Champagne, Minister of International Trade Date: January 17, 2018 Re: China and Australia, Lessons for Canada’s Financial Sector China presents an enormous opportunity to the global economy, including Canada’s. A recent C.D. Howe intelligence memo highlighted the importance of the China-Canada relationship – along with some of […] Waiting for Stephen Poloz: A challenging 2018 lies ahead – Globe and Mail Op-Ed
As was widely expected, the Bank of Canada announced on Wednesday that it was not changing its target overnight rate. Despite the announcement reinforcing expectations, the emphasis on caution was enough to knock more than a half a cent off the value of the Canadian dollar before the end of Wednesday morning. With uncertainty on the horizon for 2018, the year promises to be a challenging one for our central bankers – one that will require market guidance.
The overall tone was balanced and the announcement emphasized caution. The global economy is in good shape with U.S. growth in the third quarter stronger than expected. Risks, however, remain in the form of geopolitics and trade. It also simultaneously warned that “higher rates…
Is Canada prepared for the next big financial crisis?: Globe and Mail Op-Ed
Canada has unfinished business when it comes to preparing for the next big financial crisis. Certainly, our financial system held up comparatively well in the 2008 crisis, and lots has been done, but we have shortcomings still to address.
When the International Monetary Fund last reviewed Canada’s financial system in 2014, it recommended we do better in managing federal-provincial co-ordination around systemic risk oversight, and improve systemic risk management in capital markets. The IMF will return soon for an update assessment. So the question is, how are we doing?
As argued in a recent C.D. Howe Institute paper, Canadians should expect a higher level of preparedness from all relevant federal and provincial…
Opportunities for Better Systemic Risk Management in Canada
Ottawa and the provinces should bolster their ability to monitor and deal with systemic risks to the financial system, according to a report from the C.D. Howe Institute. In Opportunities for Better Systemic Risk Management in Canada, author Nicholas Le Pan recommends greater coordination by regulators to fill gaps in the current system, and outlines a […] Nicholas Le Pan – Getting Canada Ready for Its Systemic Risk Audit
To: All Canadian financial regulators From: Nicholas Le Pan Date: September 21, 2017 Re: Getting Canada Ready for Its Systemic Risk Audit When the IMF last reviewed Canada’s financial system in 2014 it recommended we do better in managing the federal provincial coordination aspects of systemic risk oversight, and improve systemic risk management in the capital markets area. The […] Harvey Naglie – The New Capital Markets Securities Regulator Is Not Investor Friendly
From: Harvey Naglie To: Canadian Stock Market Regulators Date: September 20, 2017 Re: The New Capital Markets Securities Regulator Is Not Investor Friendly The federal government together with five provinces (Ontario, British Columbia, Saskatchewan, New Brunswick and Prince Edward Island) and one territory (Yukon) are planning to introduce a new capital markets regulator before the end of next […] Not Ready for Prime Time: Canada’s Proposed New Securities Regulator
Canada’s proposed new securities regulator , due to be rolled out next year, is not ready for launch, according to a leading financial expert. In Not Ready for Prime Time: Canada’s Proposed New Securities Regulator, published by the C.D. Howe Institute, author Harvey Naglie argues that, in its current form, the proposed regulator suffers from key […] Mortgage Insurance Deductibles: An Idea Whose Time Hasn’t Come: Globe And Mail Op-ed
The rise in house prices – especially in Toronto and Vancouver – has coincided with a build-up of risks in the mortgage market and homeowners taking on too much debt relative to their income.
In response, the federal Department of Finance has proposed shifting some of the risk of mortgage defaults onto lenders from insurers, through a mortgage insurance deductible that would come out of the lender’s pocket in the case of mortgage default. Good intent. Bad idea.
The hope is that by shifting some of the potential losses from mortgage defaults onto lenders, a deductible would reduce the number of risky mortgage loans originated by lenders. But introducing a mortgage insurance deductible is a blunt and ineffective tool that…