Skip to main content

Housing would be main casualty of SVB contagion

The Canadian banking sector is heavily concentrated, reducing the risk that deposit runs at small lenders might trigger a broader crisis of confidence for the entire sector. As things stand, the chance of the Bank of Canada soon cutting interest rates – as market pricing now implies – is low. But to the extent that recent events lead to a US credit crunch, Canadian banks could be forced to tighten credit conditions as well. The main casualty would be the housing market, which has so far been insulated from the impact of higher interest rates due to lenders’ willingness to significantly extend mortgage amortisation periods.      

Become a client to read more

This is premium content that requires an active Capital Economics subscription to view.

Already have an account?

You may already have access to this premium content as part of a paid subscription.

Sign in to read the content in full or get details of how you can access it

Register for free

Sign up for a free account to:

  • Unlock additional content
  • Register for Capital Economics events
  • Receive email updates and economist-curated newsletters
  • Request a free trial of our services


Get access