Banks Warn of Growing Energy-Related Risks in Mortgage Portfolios
Across Europe, banks are trying to figure out how to handle a growing risk lurking in residential mortgage portfolios: energy consumption.
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Across Europe, banks are trying to figure out how to handle a growing risk lurking in residential mortgage portfolios: energy consumption.
South Korea’s top financial watchdog attempted to revive optimism over the nation’s corporate reform initiatives to investors in New York while soothing concerns over the short-selling ban.
Inflation-related releases across the Group of Seven will prime central bankers for crucial June interest-rate decisions, just as they meet in Italy to discuss the state of the world economy.
Big US bond investors have been aggressively shifting money into long-dated notes, betting that the unloved asset class will be one of the winners from eventual interest rate cuts.
A measure of underlying US inflation cooled in April for the first time in six months, a small step in the right direction for Federal Reserve officials looking to start cutting interest rates this year.
Feb 5, 2019
Bloomberg News
,Canada’s banking regulator defended tougher mortgage underwriting rules blamed recently for a slump in the nation’s housing market, but left open the possibility that regulations could ease if conditions change.
Carolyn Rogers, the No. 2 at the Office of the Superintendent of Financial Institutions, said the tougher mortgage lending rules remain a prudent way to guard against risks in the the marketplace. Still, the regulator is continually assessing conditions.
“OSFI monitors the environment on a continual basis and when we determine that adjustments to our standards and guidelines are warranted, we make them,” Rogers said in a speech Tuesday in Toronto.
The country’s banking regulator has been facing pressure in particular to ease up on stress tests that require home buyers to prove they can handle payments at 200 basis points above the contracted rate. The rule came into effect in January 2018, triggering a sales slow down in the country’s two priciest markets — Toronto and Vancouver.
Rogers said that while interest rates have increased since the measure was introduced, borrowing costs still remain historically low and personal debts remain high. There could also be changes to income or other home owning expenses that make it difficult to pay off mortgages.
“It’s prudent to have a buffer for these changes as well,” she said.
At the same time, the introduction of the stress tests themselves were an adjustment to a “shift in risks” in the financial system and things could change.
“Should that margin of safety be monitored, and should changes be considered if conditions in the environment change? Of course they should,” she said.