Feds seek input on shifting some mortgage default risk from taxpayers to banks – CanadianBusiness.com + MORE Oct 21st

CBC.caAt the open: TSX starts flat amid rate speculationThe Globe and MailCanadian stocks opened flat on Friday after a drop in Canadian retail sales in August and cooler-than-anticipated annual inflation in September reinforced speculation the Bank of Canada may lower interest rates again. The S&P TSX index was down 0.02 …Canadian stock futures dip ahead of inflation, retail sales dataBNNHigher Prices For Shelter And Transportation Put Inflation Up 1.3% For September640 Toronto NewsCanadian Inflation Climbs 1.3% in SeptemberWall Street JournalNews Talk 770 Calgary -CBC.ca -Bloomberg -CFJC Today Kamloopsall 40 news articles »

OTTAWA – The federal government formally launched consultations Friday to explore potential changes that would shift some of the financial risk tied to insured mortgages from the shoulders of taxpayers to lenders, such as the banks.
Under Canada’s current system, lenders are able to transfer virtually all of the risk from insured mortgages to insurers, which are indirectly backstopped by taxpayers, the government said.
The Finance Department has been examining the possibility of making such a change for a couple of years and it’s now seeking more input.
Finance Minister Bill Morneau announced the consultations into so-called “lender risk sharing” earlier this month as part of a package of changes related to Canada’s housing market.
.cbR{box-sizing:border-box;display:block;width:100%;margin:1em 0;border:1px solid #bbb;padding:.5em}@media (min-width:480px){.cbR{width:250px;margin:0 0 1em 1em;float:right}}Mortgage insurance changes will impact buyers and banks
The consultations are designed to help Ottawa determine whether having lenders absorb a modest chunk of loan losses on insured-mortgage defaults would help shore up stability in the system…

TORONTO – A new survey from EY suggests Canadians are becoming less dependent upon their banks as the main providers of financial services.
The business consultancy firm says a quarter of those polled agreed with the statement, “I’m less reliant on established (financial services) companies and banks these days, as there are more options to self-manage my finances.”
Another five per cent of the respondents strongly agreed with the statement, while 21 per cent disagreed, five per cent strongly disagreed and 39 per cent said they neither agree nor disagree. Another four per cent said they don’t know.
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The top reasons cited by consumers for considering a non-bank provider included more attractive rates, access to different products and services, how easy it was to set up an account and a better online experience…

Bank of Canada governor Stephen Poloz. (Chris Young/CP)
Some watchers of the Bank of Canada haven’t been paying attention.
Bloomberg News, Reuters, the Financial Post, and the Globe and Mail’s Report on Business (subscribers only) all wrote about the air pocket the Canadian dollar flew into after Governor Stephen Poloz read his opening statement at the central bank’s quarterly press conference on Oct. 19. Everything was fine after the central bank announced that it had decided to leave its benchmark interest rate at 0.5%, while stating that it had cut its outlook for economic growth and indicating that it would take longer to achieve its inflation target. Those two things should have triggered some repricing, as the Bank of Canada’s outlook had materially changed. But that didn’t happen until Poloz said these words about an hour later: “Given the downgrade to our outlook, Governing Council actively discussed the possibility of adding more monetary stimulus at this time, in order to speed up the return of the economy to full capacity…

The Globe and MailFeds seek input on shifting some mortgage default risk from taxpayers to banksCanadianBusiness.comOTTAWA – The federal government formally launched consultations Friday to explore potential changes that would shift some of the financial risk tied to insured mortgages from the shoulders of taxpayers to lenders, such as the banks. Under Canada's …Conservative Party leadership candidate calls for CMHC privatizationMortgage Broker NewsCanada's mortgage brokers find ways around new lending rulesReuters CanadaBritain is still a nation that wants to be home owners, new survey showsProperty WireInternational Law Office (registration)all 25 news articles »