IMF Releases Assessment Of Canada’s Financial Sector

Yesterday, the International Monetary Fund (IMF) released its Financial Sector Assessment Program Report (Report) on Canada (which the IMF is required to prepare every five years). The Report noted that Canada's financial system successfully navigated the global financial crisis, and that stress tests suggest that major financial institutions would continue to be resilient to credit, liquidity and contagion risks arising from a severe stress scenario. The Report also noted that elevated housing prices and high household debt remain areas of concern (despite the substantial level of government-guaranteed mortgage insurance), though targeted prudential and macro-prudential measures were proving to be effective. The Report concluded that the regulatory and supervisory framework is strong and is complemented by a credible federal system of safety nets, although there is no single body with an explicit mandate to take a comprehensive view of systemic risk or to undertake