A potential downturn in Canada’s housing market and adjusting to rapid increases in interest rates are among the biggest risks to Canada’s financial system this fiscal year, the country’s financial regulator said on Tuesday.
The Office of the Superintendent of Financial Institutions (OSFI) said it was ensuring that federally regulated financial institutions were alert to changing market conditions in its first annual risk outlook report for the year ending March 31, 2024.
“OSFI is preparing for the possibility, but not predicting, that the housing market will experience sustained weakness through 2023,” said Peter Routledge, Superintendent at OSFI.
The regulator also said the adjustment to higher interest rates “may not be completely smooth” and that it was intensifying monitoring of market liquidity.
(Reporting by Maiya Keidan and Ismail Shakil)