Stephen Poloz, governor of the Bank of Canada, speaks during a press conference in Ottawa, Ontario, Canada, on Wednesday, Jan. 22, 2014. Poloz kept his main interest rate unchanged and said the direction of his next move will depend on the economy's evolution. Photographer: Cole Burston/Bloomberg *** Local Caption *** Stephen Poloz Cole Burston/Bloomberg
Bank of Canada governor Stephen Poloz held a news conference today to report on a review of the financial system.
The Financial System Review is a report on threats to the country’s economy and financial sector.
The Bank of Canada ’s is sounding the alarm about the country's housing market and high levels of household debt.
The central bank says Canada's housing market is showing signs of a soft landing, but it remains the biggest domestic risk facing Canada.
The probability of a sharp housing correction, particularly in prices, is small, the bank says, but the consequences would be large for highly indebted households, some financial institutions and the economy in general.
The conference comes a day after the Organization for Economic Co-operation and Development told Canada it was concerned that rising home prices were widening inequality and the IMF warned that high house prices might be a threat to global growth.
Poloz has also spoken recently about the two-speed economy, with resource-rich provinces doing well, but the rest of Canada's recovery still in neutral.
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