Housing rush scrutinized
OSFI is taking a broad look at bank exposure to household debt and how the financial in-stitutions are monitoring loan portfolios amid growing concerns over the ability of Canadians to handle their debt load.
In the case of the housing market, sources point to global trends that could affect investment in Canada -like China's recent policies to curb speculative real estate investment in that country -as evidence that Canada is operating in a fastchanging market that could be adversely affected by decisions made in other countries.
They suggest OSFI wants to know how big a factor foreign investment in Canada's housing market is, and how big it is likely to become, so the regula-tor can measure the potential impact on banks if demand were to dry up.
If CMHC is not used as a bailout mechanism. If unwisely issued loans are kicked back or cost-shared with the banks, the picture changes radically.
"I wouldn't be surprised, given what [the Canadian Real Estate Association] has been saying about foreign investment having such a big impact, that it would elicit an investigation," said Mr. Alexander, adding that he knows of no existing measure of foreign investment in housing.Given that this has happened before in Vancouver before the changeover in Hong Kong, and given that the Canadian dollar is a small currency, I find this blind-eye sort of alarming.