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Bank of Canada addresses CFA Society - Bubble, Bubble Or No?

The debate about a possible housing bubble in Canada continue to occur. The topic was one of many raised by David Wolf, a representative of the Bank of Canada, he stated that, in the last minute of the Edmonton CFA Society on behalf of Timothy Lane, the deputy governor of the Bank.

The fact that Mr. Wolf was the party that made last year, the gloomy forecast that Canada's economy has been delivered in an unstoppable free fall all even more interesting. At the time he was with Merrill Lynch Canada. Naturally there were questions about this prediction and change of employer, and they were answered, but off the record.

Mark Carney, governor of the Bank of Canada has been concerned that Canadians were too much debt and maybe buying a house they could not afford. Talc was from rising mortgage rates and stricter lending rules. Wolf speech softened that view, stating that while the Bank of Canada to the situation keep in mind that it may be too soon to predict a housing bubble watch.

This contradictory opinion sparked a debate on how much influence on the Canadian economy of the Bank of Canada, and perhaps should, have. The banking relationship with the real estate industry, a key factor for the health of the economy, was also discussed. The point is that the real estate industry can make a big impact on a country's financial health was driven home in 2007, when the economy the United States was a sea of bad mortgages paralyzed.

Canada's lending requirements are stricter than in the United States. We need Mortgage insurance on a purchase with less than 20 percent down payment. This prevented us from going into financial free fall that the United States is still trying to get out. Yes, we have and still do have our own financial troubles, but ours are more like an Easter bunny Ski Hill, instead of Mt Everest.

About the Author

Jason Luke - Coquitlam Real Estate Report

HealthCare March