Canadian bankers tell G20: Don't suffocate our growth

[CHIMO]

Canada's top bankers are pushing back against a crusade for tougher global rules that would govern the financial sector.

The chief executive officers of the country's biggest banks, fearing that reforms to the global banking industry are being hammered out in haste, are becoming unusually assertive in speaking up about the issue as the G20 summit in Toronto draws near. They worry that the common ground among policy makers could lead to the imposition of punitive rules that harm their businesses.

One proposal, for example, would not give Canadian mortgages enough credit for being liquid assets and would require them to be backed by too much capital, bankers say. That would have a major impact on Canadian banks, whose domestic mortgage portfolios account for 40 per cent of loans and are the most significant part of their retail lending operations.

“When you're going to change the financial model of the world, be very careful how quickly you act,” Bank of Nova Scotia CEO Rick Waugh said in an interview.

http://www.theglobeandmail.com/report-on-business/canadian-bankers-tell-g20-dont-suffocate-our-growth/article1526766/

[ZeitgeistObserver]

1. Luckily, we'll be ignored, even with

Harper chairing it this year.

[eridani]

2. Why does Canada need tougher rules anyway? No bank failure there at all AFAIK

Doesn't that mean perfectly good regulatory standards?

[Po_d Mainiac]

3. It's called a housing bubble

All the shit hitting the fan on your southern flank, and you
didn't learn from our fuck-ups.

January 2010
City 	       Average House Price 	12 Month Change
Vancouver, BC 	  $638,000 	        + 18.9 %
Toronto, Ont 	  $409,000 	        + 19.0 %
Calgary, Alb 	  $382,000 	        + 5.5 %
Ottawa, Ont 	  $324,000 	        + 11.3 %
Montreal, Que 	  $284,000 	        + 11.1 %
Halifax, NS 	  $242,000 	        - 0.4 %
Regina, Sask 	  $214,000 	        - 6.2 %
Fredericton, NB   $164,000 	        + 6.0 %

http://www.livingin-canada.com/house-prices-canada.html

[b]Are your average wages per/year 1/3 of your housing prices?
If not, the boom is about to bust...

[eridani]

4. But don't the banks have to avoid crap like sub-prime lending?

How come no bank failures in Canada?

[Po_d Mainiac]

5. The bubble does not have to be due to sub-prime

But those are prices that cannot be sustained at current ratios to income. Double digit increases in valuations scream Bubble! If/When the market corrects/bursts, the borrowers will default and lenders WILL fail.

It happened in Japan. It's just happened throughout much of the US. (And we're just getting started..IMHO)

The tangibles are;
Have the financial institutions plowed into the HELOC abyss as well?
Will the Central bank allow institutions to mark their assets to "myth" or demand market evaluations?

As long as the RE market holds, the banks are technically solvent. US banks weren't failing in 2005 and life was a blast. A mere 2 years later and :kaboom:

[CHIMO]

6. Home prices in Vancouver hit million-dollar landmark

Vancouver's super-hot real estate market has hit an expensive milestone, with the average price of a home reaching $1 million for the first time.

http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20100406/vancouver_100406/20100406?hub=Canada

[Po_d Mainiac]

7. If all the "average" buyers have at least 20%

down payment and an annual household income of $265K...No problem.

[girl gone mad]

8. They're in the midst of an epic housing bubble.

I think the average home price in Vancouver just topped $1,000,000.

It won't end well, but the sooner the bubble pops, the better.