Canada’s big banks are able to cope with higher levels of defaulted loans as a result of the oil crisis.
That’s the latest assessment from Toronto-based ratings firm DBRS which says the spread of large bank’s mortgage portfolios across the provinces should make a rise in Alberta loan losses manageable.
However, should interest rates rise sharply or there was a large hike in unemployment levels, there would be increased risk to lenders.
The report is roughly in line with that of the Bank of Canada which said Thursday that the financial system is generally well-placed to deal with current conditions, despite concerns over the rise in house prices in some areas and higher household debt.
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