Deputy Governor Sylvain Leduc said Monday that the risk of an unexpected shock to the economy remains low but households may struggle if the unexpected were to happen.
"House prices are going up, people are reaching maybe a bit more and getting a bit more indebted. And the fact that the indebtedness is rising the most for highly indebted people is really worrisome," Leduc said.
He warned that if borrowers were unable to service their debts, it could pose a risk to the stability of the financial system. However, he highlighted the system’s strength to withstand its biggest risk, a rise in unemployment.
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The Bank of Canada has repeated its concerns about rising house prices and high levels of household debt.