Former BofC Governor Plays Down Household Debt Warnings

Canada’s current and former central bankers seem at odds over the country’s soaring consumer debt, with former Bank of Canada governor David Dodge playing down warnings by his successor, Mark Carney.

“I don’t think it’s in trouble,” he said, noting most consumers aren’t overexposed. In areas where employment levels remain high (such as Alberta, which Statistics Canada reports has Canada’s highest per-capita consumer debt level), debt loads are “probably not such a big deal.” And so long as interest rates don’t rise past historically average levels, it would be “a bit of a squeeze, but that’s kind of manageable.”

One tool to slow rising debt levels could be changing the rules around qualifying for a mortgage. “Maybe they should be a little bit tighter at the moment,” Mr. Dodge said.

See the entire article on the Globe and Mail’s website