The former chairman of the Federal Reserve says that Canada has some tools to cope with the hot housing market, something that was not the case in the US housing crash. Ben Bernanke was talking at an event organised by the Globe and Mail and said that “Canada has made some progress” in areas such as requiring higher downpayments and other mortgage lending restrictions.
He noted that the largest risk is not of a price correction but the potential impact on the wider financial system which he said must be protected. As he reflected on his time at the Fed during the financial crisis, he said that the housing market’s impact on the economy was due to a regulatory system with “a lot of gaps in it.”
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