Canadian housing agency says it can withstand market shocks

Canada’s federal housing agency said on Tuesday it is well capitalized and able to weather severe but unlikely scenarios including a global trade war and repeated cyberattacks on Canadian financial institutions.

The Canada Mortgage and Housing Corporation (CMHC), responsible for insuring the bulk of Canadian mortgages issued by banks and other big lenders, uses annual stress tests to gauge its resilience to extreme scenarios. It began publishing the results in 2015.

The 2018 stress test confirmed CMHC’s mortgage loan insurance and securitization business had enough capital to withstand the impact of scenarios which also included a household debt crisis and the eruption of a volcano.

“In all cases, this year’s stress testing shows we are well capitalized to handle these very severe situations,” CMHC’s Chief Risk Officer Steven Mennill said in a statement.

Mennill told reporters on a conference call that the tests showed CMHC was in a better position to withstand extreme scenarios that it was a year ago.

Reuters

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell