"Risks to financial system were described as slightly higher owing to weaker growth, but the risk scenarios were unchanged from 2018 and the Bank noted progress addressing two key vulnerabilities (high household debt and imbalances in the housing market)," TD Securities analysts said assessing the Bank of Canada's Financial System Review.
"The financial system was described as resilient overall."
"The BoC did introduce a few new vulnerabilities: fragile corporate debt funding, climate change, and changes in crypto asset markets. Concerns around corporate debt specifically pertained to the reliance on funding in US high yield and leveraged loan markets for some firms, which exposes them to swings in investor sentiment."
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