Who should worry most about an overheated housing market?
Overstretched owners with big debt? Renters who want to buy? Government?
What about Bank CEOs?
TD CEO Ed Clark says that bank CEOs ‘should be worried’ about the Canadian housing market.
While he isn’t worried about a full-blown bust, Mr. Clark believes chief executives simply can’t ignore warning signs in the market – particularly the sudden run up in prices for real estate of all stripes. “If you run a bank, you should be worried about it,” he told the audience at a bank conference in Toronto.
Now if banks start to worry about insured mortgages, maybe the taxpayers insuring them should be worrying a bit too.
Of course other bank CEOs have said that there is no problem and lending has been prudent and restrained.
That article ends up with possibly the weirdest last paragraph of the year so far:
Mr. Clark’s comments Tuesday weren’t the first he’s made on the topic, but this time he went into more detail on how his bank is changing its behaviour.
“We’re saying ‘no’ lots of times” to potential real estate borrowers,” he said, some of whom are big, lucrative clients. Mr. Clark wouldn’t name names, but he noted that in one instance, Tim Hockey, the bank’s head of Canadian retail and commercial banking, was “virtually in tears” for having to turn the client down.
The austerity! it hurts!