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ShiyuandCristina SC

Rich-poor gap could spark financial crisis in Canada: Report | Money | Toronto Sun - 1 views

  • The gap between the rich and the poor in Canada is getting wider and could eventually lead to an economic collapse, according to a new report by a left-wing think-tank.
  • Income for middle-class Canadians has remained stagnate since the 1980s, while the income of the richest 1% has increased dramatically
  • When the rising savings of the rich are parked in the financial markets, but everyone else falls deeper into debt, a house of cards is created, producing the kind of economic instability that led to the 1929 financial sector crash and the market meltdown of 2008."
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  • As a result, Canada's income inequality has reached a level not seen since the 1920s, says Canadian Centre for Policy Alternatives.
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    The problems created by income inequality in Canada could possibly lead to a financial crisis. 
Ms Cuttle

Are Canada's financial institutions in perfect shape? Don't bank on it - Business - Mac... - 1 views

  • Less than 24 hours after Lagarde put down her dessert fork, debt rating agency Moody’s put six of Canada’s biggest banks under review for a possible ratings downgrade, citing high consumer debt levels and a frothy housing market.
  • Household debt-to-income ratios now stand at 163 per cent, higher than in the United States before its housing crash and up from 147 per cent two years ago.
  • RBC last week revealed plans to spend $1.4 billion to buy auto lender Ally Financial while TD said it was buying retailer Target’s credit card business. The Bank of Nova Scotia also recently purchased the online bank ING Direct for $3.1 billion.
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    Should Canadians be worried about the financial stability of our banks?
Brijesh Patel

Bank of Canada flags lenders' role in consumer debt - 1 views

  • Canadian families owe nearly $1.65 on average for every dollar of after-tax income, the highest level in 22 years of tracking those figures.
  • the government would no longer insure mortgages that are amortized over a period longer than 25 years.
  • fierce competition for customers caused some major banks to begin offering five-year mortgages at 2.99 per cent, triggering a price war in the sector.
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  • You should be cautious about your lending practices, because this is the type of practice that led to a mortgage crisis in the United States several years ago,
  • Statistics Canada saying in December that the most recent data suggest Canadian families owe nearly $1.65 on average for every dollar of after-tax income.
  • physically present also have a greater proportion of consumers with too much de
  • The Bank of Canada has been scrutinizing whether competition among
  • The governing council was told about the role that discounting plays in how much individuals pay for their mortgage and notes that there is “substantial dispersion in rates across people, institutions, and markets.”
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    Funding costs rose dramatically during the financial crisis when liquidity dried up, pushing up the costs of consumer and business loans Finance Minister Jim Flaherty tightened the rules on mortgages for a fourth time in four years, saying the government would no longer insure mortgages that are amortized over a period longer than 25 years "Neighbourhoods with more bank branches and payday lenders per capita (i.e. more competition) have looser lending standards (higher leveraged households) and experience greater bankruptcies"
Brijesh Patel

Canadian consumer debt soars 53 per cent - 1 views

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    - In the past 5 years, consumer debt has increased by 53% - The most borrowing occurring in the two years right after the global financial crisis. - Canada's household debt to income ration jumped to 163.4% - Canada's debt-to-income ratio has now reached a record high, topping levels seen in the U.S - Currently, the Canadian housing market is in a state of decline, with home sales dropping 15 per cent in September.
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    #2 what is causing the debt ratio to increase drastically ?
Cristina Raileanu

Canadian consumer debt climbs to record levels in 2012 | CTV News - 0 views

  • That's about the level reached in the United States before the financial crisis.
  • the household debt to income ratio stood at 164.6 per cent,
  • navigated through the risks so far, but the time has come to pay off your bills before that happens.
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  • The Bank of Canada is expected to keep its key rate on hold for now, giving Canadians a window to start reducing their debts before costs start to rise.
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