Risk of shock to financial system down, but concerns linger: Bank of Canada survey

OTTAWA –

Risk administration consultants imagine the chance of a shock that would impair the Canadian monetary system has decreased since final 12 months, however concern stays round geopolitical tensions, excessive inflation, unemployment and family debt burdens.

The Bank of Canada’s 2023 Financial System Survey exhibits that confidence within the resilience of the Canadian monetary system is at its highest degree for the reason that central financial institution’s first such survey in 2018.

Experts cite a well-capitalized banking sector and well-regulated monetary system, saying they count on regulators, central banks and governments would intervene within the occasion of a major shock.

Respondents who imagine the chance of a shock is larger within the subsequent one to a few years say they’re involved that top inflation might linger and quantitative tightening might result in deteriorated market liquidity.

They say a profitable cyber assault on a Canadian monetary establishment or main monetary market infrastructure might lead to system-wide disruptions, whereas geopolitical tensions might weigh on the pricing of threat property globally.

The survey was accomplished by 58 senior consultants in threat administration between Feb. 21 and March 10.

This report by The Canadian Press was first printed May 15, 2023.