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ZT 原标题 DIRE WARNING FOR HOMEOWERS
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) n. i: A/ `( H! }6 E( MBank of Canada warns of possible debt, mortgage defaults if conditions worsen
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* I3 K# E. N. i1 G1 `Julian Beltrame, The Canadian Press Email Story IM Story Printable View
4 U( A9 H L2 b2 @- nBy Julian Beltrame, The Canadian Press
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) I/ J/ s/ h$ ROTTAWA - Mortgage and consumer debt defaults could rise "significantly" if the global financial crisis deteriorates and triggers a widespread and deeper recession that cuts household income and makes it harder to pay the bills, the Bank of Canada warns.
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In a sobering assessment of the financial crisis, the central bank concludes that significant risks remain for both the global economy and Canada if credit conditions don't begin to improve.
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7 R3 |% \, _5 ^3 l; t5 c+ K"With household balance sheets under pressure from weak equity markets, softening house prices, slowing income growth, and record-high debt-to-income ratios, a severe economic downturn could result in a substantial increase in default rates on household debt," the bank writes in its December financial systems review released Thursday. 6 a& R0 V: T9 a: D$ s- Y7 O
" F! z7 s3 s2 W6 N: w1 mThe Bank of Canada says the number of "vulnerable households" - the three per cent with a debt-to-income ratio above 40 per cent - could double by the end of next year under this pessimistic scenario. 8 V; ? Z8 Y) D" @, l
: @7 d- V8 k& [The central bank notes that this would be a worst-case scenario. The "most likely outcome" is for global markets and credit conditions in Canada to gradually improve, it states.
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- a0 {" ?* d8 ~. i) R- B. V) k2 HThis is partly because central banks and governments around the world have leaped into action with extraordinary measures such as liquidity injections, asset swaps, cash infusions and credit guarantees to backstop financial institutions. ( U3 J- U% `, O- l6 }
0 U- f- O4 ` n' ]But the central bank's top officials also warn that the crisis is far from over and that there is "a significant risk of mutually reinforcing weakness in the financial sector and in the real economy."
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The Canadian economy is now in recession and is expected to shrink or grow only marginally in 2009, pushing the jobless rate to well above seven per cent, with little recovery until 2010. + D+ X% t: M1 ?$ z& j, {. O
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Given the uncertainties, the bank officials outline five potential risks for the world and Canada that includes tighter lending conditions as banks are forced to restore their cash reserves, thereby creating a deeper and more prolonged recession.
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7 y9 s4 J: {6 N3 R$ W0 W2 TFor Canadians, the repercussions of a deepening recession will be profound, including more unemployment, lower income growth and more home defaults from crushing debt loads, the bank says in its worst-case assessment.
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And while Canadians' access to credit has not tightened significantly during the financial crunch, this could change if the crisis persists, the bank says. . O. C" }3 _! m0 p( T/ M8 j, ~
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"The continued reluctance of lenders to enter the market, owing to uncertainty over their future funding needs and existing risk exposure, risks delaying the return of confidence and more normal financial conditions," the bank says.
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"(This) could aggravate the adverse feedback loop between the financial system and the real economy." ; y0 A: T* b8 x; Q0 [
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The risk assessment is noteworthy for its predominantly gloomy outlook - although it remains a hypothetical one - and for the fact it was written by the bank's governing council headed by governor Mark Carney, rather than by lower-rank bank staff as is usually the case. 9 S x# s7 W7 ~( g8 {. Y, _ q1 ^
# B6 D* a: B( A, N7 b! }The global credit crunch has dried up lending to companies by banks and made it more difficult in many countries for ordinary borrowers to get money for lines of credit, consumer and car loans and mortgages.
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/ R6 A# h5 s8 R% ?, p& oIn the United States, millions of Americans have lost their homes in the last two years with the collapse of the sub-prime, or high-risk mortgage market, which led to sharply higher interest rates for homeowners with poor credit and produced widespread foreclosures. 4 [4 j' A6 U7 E# ?
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In Canada, however, the housing sector has been more stable, but the jump in home prices that led to soaring values in Vancouver, Calgary, Toronto and other cities has begun to reverse, with dropping values in previously hot markets.
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Statistics Canada reported Thursday that new home sales fell for the first time in a decade in October, dropping 0.4 per cent from September.
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Some economists warn that falling prices could lead to a housing slump and more defaults, although foreclosures are usually a last resort and banks try to cushion the blow by renegotiating easier repayment terms. 9 m. F' K: s3 }2 G8 |3 _
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Canadian banks are among the best-capitalized in the world but would not emerge unscathed, the central bank's analysis concludes.
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Much as has happened in the United States, the officials say household debt woes could be a channel of contagion spreading through the banking system and further restrict the availability of credit. " _! M4 {( z2 @* T. O2 r
" G; d8 B6 G: R3 @1 E5 n; @Banks are somewhat insulated by mortgage insurance, but the Bank of Canada says a severe economic downturn would nonetheless put pressure on their capital ratios. % Q5 N% T3 }2 U; M' n! G3 z. d
- D& U9 h9 ~+ U/ UThe central bank does caution that the vulnerability of Canada's housing sector should not be overstated. 2 g5 E O$ Z' I
c0 b: s) E0 A7 sIt notes that lending practices in Canada have been far more conservative than those in the U.S. and that subprime mortgages account for about five per cent of the market as opposed to 14 per cent in the U.S.
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As well, although debt is high, low interest rates means that at present most households are able to comfortably manage their financial obligations- I- b8 F) h. t; [
/ K( | D9 Q9 B总体不乐观，好在最后两点是好消息。 |
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