OTTAWA — The governor of the Bank of Canada says managing the risks from the pandemic is more critical than ever, saying it is key to a recovery and the stability of society.
Governor Tiff Macklem says in a speech this morning that a second historic recession in just over a decade underlines how managing financial system risks matters to the livelihoods of Canadians.
And he identifies a few of the risks the bank will be keeping an eye on, including how many companies and households can’t keep up with debt and mortgage payments.
Companies and households have been given a financial lifeline during the pandemic, including deferrals on mortgage payments, a drop in the central bank’s key policy rate, and billions in federal aid and credit programs.
Macklem says in a speech to the Global Risk Institute that the extraordinary actions have cushioned the economic blow from the pandemic, but may leave the country vulnerable to future shocks.
But it’s not the only risk Macklem warns about, pointing to the long-term impacts climate change will have on the financial system and domestic economy.
This report by The Canadian Press was first published Oct. 8, 2020.
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