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发帖数: 29846 | 1 http://www.bloomberg.com/news/2010-12-14/canadians-with-more-debt-than-u-s-spark-policy-makers-warning.html
Canada’s top economic officials yesterday urged households to be wary of
taking on too much debt after data showed the indebtedness of Canadians
surpassed U.S. levels for the first time in 12 years.
Bank of Canada Governor Mark Carney, Finance Minister Jim Flaherty and Prime
Minister Stephen Harper said in separate public appearances that they are
concerned about rising debt. The ratio of household debt to disposable
income in Canada was 1.48 in the third quarter according to Statistics
Canada, exceeding the U.S. level of 1.47.
“Our parents were more inclined to pay off that mortgage as soon as
possible, and some Canadians are not as inclined to do that now,” Flaherty
told reporters yesterday. “I encourage them to do it.”
The comments by the policy makers underscore government concern that debt
levels in Canada could threaten the recovery if borrowing costs rise and
households struggle to pay their bills. Canada has relied on regulatory
steps to rein in mortgage borrowing, most recently in February, and Flaherty
said yesterday he is prepared to take additional measures if needed.
“The fear is that were we to see sharp rises in interest rates or were we
to see sharp rises in unemployment, that a significant number of people
might not be able to afford their debt obligations,” Flaherty said.
In Canada, where banks largely escaped the global financial crisis and
continued to lend even as credit dried up elsewhere, low interest rates have
encouraged consumers to take on debt.
Limits to Divergence
Carney, 45, left the benchmark target rate at 1 percent this month to gauge
the global recovery after three earlier increases, while the U.S. Federal
Reserve has kept its benchmark rate in a range of zero to 0.25 percent since
December 2008. Carney said in a Sept. 24 interview on CNBC that “there are
limits to the divergence that there can be between Canada and the United
States.”
While Canada’s economic recovery could be threatened in the future by
elevated debt levels, higher Canadian interest rates could also cause the
Canadian dollar to appreciate. Speaking to reporters after a speech in
Toronto, Carney noted that the bank had flagged as a risk to the economy
that “persistent strength of the Canadian dollar” and weak productivity
could crimp exports and hinder Canada’s recovery.
“To some extent that risk is being realized, which is one of the things we
will have to assess as we sit down in January,” Carney said, referring to
the bank’s next interest rate decision and monetary policy report.
Boxed In
“The Bank of Canada is in a bit of a box, given where the Fed is and where
the Canadian dollar is,” said Doug Porter, deputy chief economist with BMO
Capital markets in Toronto.
Canada’s dollar rose for the fifth consecutive day today to post the
longest winning streak in more than a month. The currency has gained 2.2
percent this month versus the U.S. dollar. The Canadian dollar rose 0.3
percent to C$1.0047 per U.S. dollar at 1:19 a.m. in Toronto, from C$1.0074
yesterday. One Canadian dollar bought 99.53 U.S. cents.
Measures to restrain lending taken earlier this year included changes for
government-backed mortgages that forced buyers to meet standards for five-
year, fixed-rate mortgages even if they opt for variable rates. Limits on
refinancing were made stricter and down payment rules were tightened.
The proportion of Canadians in a stretched financial position “has grown
significantly,” Carney said in his speech -- entitled “Living with Low for
Long” -- adding that authorities continue to monitor households’ finances.
Watching Closely
“The level of vulnerabilities of households remains high” Carney said at
the press conference. “The authorities are cooperating closely, we are
continuing to monitor the situation closely.”
“We have debt levels that are unprecedented in this country,” Carney said
in an interview broadcast today on BNN Television. “We are in uncharted
territory.”
To be sure, Harper said his government cannot “exaggerate” the degree with
which it can control borrowing.
“We are a free country and people are entitled to make their own financial
decisions,” Harper said. “This is a matter that is of concern to the
government, we continue to warn Canadian households that interest rates are
unlikely to go down.” |
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