Bank of Canada Governor issues caution

Ottawa – December 16/09

As Bank of Canada Governor Mark Carney downplayed talk of a domestic housing bubble on Wednesday he also warned home buyers and banks to avoid excess household debt, saying policymakers could take action to curb debt levels if necessary.

In a speech addressing concerns of an overheated housing market, Carney repeated that Canadian household debt has risen sharply relative to income but said the risks to the financial system are small.

"At present, the risks arising from the Canadian household sector are relatively low. Indeed, by some measures, Canadian household finances appear quite healthy," he said

The bank has pledged to hold its key interest rate unchanged at 0.25 percent until the end of June, unless inflation gets off track. It could withdraw some or all of its extraordinary liquidity if inflation rebounds unexpectedly.

Carney also said He said Canada's economy will grow faster than other G7 countries next year but that the recovery will nonetheless be more protracted and more reliant on domestic demand than usual.

US market: mortgage delinquencies at new high

According to a Reuters report, data from Equifax Inc., shows that mortgage deliquancies rose to a new record in November. And, that this could remain high in December as American consumers focus on holiday expenses.