Caution Given Over Canadian Debt

Based on the international body of central banks, the increasing price of homes in Canada and the likelihood of increased interest rates are amongst the threats facing the financial sector of the country.

The credit-to-GDP increased level for Canada was cautioned by the Bank for International Settlements that the economy of the country is vulnerable and prone to a financial crisis.The credit-to-GDP level is at 17.4 per cent, and that is far above the establishment’s – closely scrutinised – threshold of 10 per cent.

Despite the quarterly report stating that the level of debt is currently under control, it cautions that the increase in interest rate at 250 basis points (2.5 per cent) would likely cause havoc in the economy.