Canada’s banking regulator said changes will leave lenders with more capital to tackle risks related to mortgages in negative amortization
Canada’s banking regulator on Tuesday proposed changes to capital adequacy guidelines for lenders and insurers to help them manage mortgage risks better.
The Office of the Superintendent of Financial Institutions said changes to the guidelines for capital adequacy requirements and mortgage insurer capital adequacy test will leave lenders with more capital to tackle risks related toNegative amortization is a situation in which the amount that borrowers owe keeps rising as their payments are not enough to cover the due interest.
“The proposed changes should encourage banks to lessen the number of mortgages that would otherwise go into negative amortization,” OSFI said. A record pace of interest rate hikes in Canada has led to the repayment period for many variable rate mortgages extending to more than 30 years, helping shield households from higher borrowing costs but raising debt loads and worrying regulators.
The regulator has sought feedback on its proposals by Sept. 1, and said the changes would not lead to an increase in monthly payments for consumers.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
America's big banks face one of biggest regulatory overhauls since the financial crisisFederal Reserve’s top banking regulator proposes changes including setting aside more money as a cushion to protect against losses. Read on
Read more »
America's big banks face one of biggest regulatory overhauls since the financial crisisFederal Reserve’s top banking regulator proposes changes including setting aside more money as a cushion to protect against losses. Read on
Read more »
America's big banks face one of biggest regulatory overhauls since the financial crisisFederal Reserve’s top banking regulator proposes changes including setting aside more money as a cushion to protect against losses. Read on
Read more »
WonderFi interim CEO on possible changes now that crypto merger is finalized - BNN BloombergWith WonderFi’s merger with Canadian cryptocurrency exchanges Coinsquare and CoinSmart now closed, its interim CEO is hinting at big changes within the platforms, including changes to staffing.
Read more »
Transform your home with minimal effort: high-impact home improvement projectsEven small changes can make a substantial difference in your home.
Read more »
Who will finance the next round of LNG projects?Renewed focus on energy security following Russia's war in Ukraine changes picture for LNG
Read more »