The Takeaway with Amanda Lang: Canadians shouldn't be reluctant to seek advice on their debt
TORONTO - Scotiabank's chief executive says he disagrees with recent red flags raised over Canada's high debt levels by an international body, and that he is "comfortable" with the lender's risk profile.
Brian Porter told a University of Toronto conference today that he had a "different perspective" from the International Monetary Fund's recent warning and says they should look at the "other side of the balance sheet" which has kept pace or exceeded those overall debt levels.
His comments come after the IMF in October said that Canada's high debt levels, and higher-than-average pressure on Canadian households' ability to pay down that debt in the private non-financial sector, leaves its economy more sensitive to tighter financial conditions and weaker economic activity.
And last month, an international financial group owned by the world's central banks says Canada's credit-to-gross-domestic-product and debt-service ratios show early warning signs of potential risk to the domestic banking system in the coming years.
Porter, speaking at the Rotman School of Management's conference examining lessons learned from the global financial crisis, says that a proper analysis should look at an entity in its entirety, rather than just one metric.
He also said that Canada's banks now are holding more capital as a safety buffer than they were 10 years ago, and are in a better position to weather any future crises.