The Bank of Canada has noticed some slowing in credit growth but remains concerned that some borrowers are spending more than they earn and are therefore vulnerable, Senior Deputy Governor Tiff Macklem said on Tuesday.
"This is something the Bank of Canada is very much looking at. We have expressed on numerous occasions our concerns about rising household indebtedness. The simple fact is that consumers are consuming more than they're earning. Household credit growth has been quite strong," Macklem said in response to questions from the audience following a speech in Toronto.
Ultra-low lending rates and booming housing market have helped push the debt-to-income ratio in Canada to a record high 153%. The central bank said recently it expected that ratio to rise further in the next two years.