OTTAWA — Canada’s economy is increasingly being caught in the tail winds of the downward global spiral, but some of the country’s problems are also homegrown.
The Bank of Canada says low interest policies that it and other central banks have put in place are adding another layer of risk to the already stressed global financial system.
The Canadian central bank says near record level interest rates that have been in place since the 2008-09 recession are taking their toll on insurance companies, pension funds.
OTTAWA — The Bank of Canada may need to start hiking its trendsetting interest rate within the next year and steadily push it to 2.25% by the end of 2015, according to an international think-tank representing the world’s leading economies.
The central bank has kept its policy rate fixed at 1% since September 2010, leading to one of the most stable and favourable borrowing environments in many decades.
It will not come as a surprise to anyone who has spent more than a few cursory minutes reading ZeroHedge over the past few years (back in 2009, then 2010, and most recently here, and here) but the rolling 'beggar thy neighbor' cu
The global economy led by Europe and China continues its downward path. Will the US follow?
First let's take a look at China. Markit reports China Manufacturing PMI Declines 8th Consecutive Month.
LONDON — Canada’s finance minister Joe Oliver warned on Monday that investors could be mispricing risk as they hunt for better investment returns, and said policymakers should keep the issue under close review.
Oliver is in London to promote trade and investment, and told Reuters in an interview that the global economy remained vulnerable to financial shocks.
The banks have had a long run of strong profits but the good times are about to become a little less so, according to Ed Clark, chief executive of Toronto-Dominion Bank.
Europe remains in a shambles, the U.S. still hasn’t recovered, while in Canada strong tailwinds such as the housing market have turned into headwinds. But the real challenge, “the underlying issue” is what’s going to happen to interest rates, Mr. Clark told RBC Capital Markets’ annual bank CEO conference in Toronto on Tuesday.
Wade Slome submits:
The words “risk tolerance” are often used loosely, but unfortunately many investors and advisors look at these terms as an objectively definable statistic, like your blood pressure or cholesterol level. As if professionals were not poor enough at maintaining an even cognitive keel, the variability in individual risk appetites is often more volatile.