Poloz said the central bank saw no signs that Home Capital’s deterioration had triggered contagion, according to an interview with the newspaper on the sidelines of the Group of Seven meeting of finance ministers and central bankers in Italy.
“We’d be looking for signs that there are problems with the (financial) system as opposed to preoccupying ourselves with individual institutions,” Poloz said.
He also has some stuff to say about the housing market in general:
Poloz also reiterated in the interview the central bank’s view that recent house price increases were not sustainable, and echoed previous statements that some speculation appeared to be at play in the market. He added that did not mean a major price correction was in store.
“Often, when you have a truly unsustainable housing market, you will see very rapid price increases (and) very rapid credit growth,” Poloz said. “But we don’t see that in the credit side, so I do think a significant amount of this that is fundamental, but layered on top, is a speculative element.”
Read the full article here.