Bank of Canada warns Canadians to rein in borrowing
Posted Dec 11, 2009 07:02:43 AM.
This article is more than 5 years old.
The Bank of Canada has issued an unusually blunt warning to Canadians about household debt.
On average, Canadian families are carrying $1.42 in debt for every dollar they make
and the central bank says household debt is so hefty, it’s currently the biggest risk to the nation’s financial system.
The point of dropping interest rates to historical rates over the last year was to encourage borrowing and spending – but Bank of Canada governor Mark Carney says some of us have been going overboard, and now individual debt is at a record high.
BNN’s Kim Parlee tells CTV Newschannel that Canadians are currently carrying more debt than our counterparts in the U.S.
“They’re projected right now to get their household debt levels to about 130 per cent next year and 110 per cent in the next four years,” she said.
Carney is warning Canadians to pull back, saying interest levels may be low now, but the squeeze will be on when rates rise again – likely by the end of next year.
