Stricter mortgage rules may increase shadow banking
BARBARA SHECTER
The Vancouver Sun
TORONTO Stricter mortgage regulation could have unintended consequences, including spurring growth in the shadow banking market, an analyst is warning after Ottawa unveiled a tax change and tighter mortgage insurance qualification criteria aimed at cooling Canada’s housing market this week.
“While we appreciate the scalpel-like approach of mortgage market regulation we’ve seen from the Government and OSFI in recent years, these moves are not without risks,” Canaccord Genuity analyst Gabriel Dechaine warned in a note to clients Tuesday.
TORONTO Stricter mortgage regulation could have unintended consequences, including spurring growth in the shadow banking market, an analyst is warning after Ottawa unveiled a tax change and tighter mortgage insurance qualification criteria aimed at cooling Canada’s housing market this week.
“While we appreciate the scalpel-like approach of mortgage market regulation we’ve seen from the Government and OSFI in recent years, these moves are not without risks,” Canaccord Genuity analyst Gabriel Dechaine warned in a note to clients Tuesday.
Dechaine suggested growth in the shadow banking market segment might already have contributed to the much faster pace of growth in uninsured mortgage balances since 2014 compared to insured mortgage balances.
“If the shadow banking market benefits from the latest round of mortgage market regulation, then the Government may simply be creating a different set of problems,” the analyst concluded.
© 2016 National Post,