The Department of Finance may soon require banks to share risk with mortgage insurers, reports the Globe and Mail.
“In a briefing note to Finance Minister Bill Morneau and released under Access to Information, department officials say they are studying an option to introduce ‘risk-sharing’ for lenders, a move that would likely mean a deductible payable by the banks on the mortgage insurance provided by Canada Mortgage and Housing Corp. (CMHC) and its private-sector competitors,” says the Globe.
A Finance Canada spokesperson cited OECD and IMF recommendations when explaining why the government was analyzing “housing-related vulnerabilities.” Read the full story here.
Overheated housing markets have led to much hand-wringing. The briefing note’s release comes on the heels of Vancouver imposing a 15% tax on foreign property buyers.
Here’s more analysis of the Canadian market: