'The crisis is not over': Carney

Bank of Canada governor issues warning to Canadians carrying too much debt

Bank of Canada Governor Mark Carney warned Canadians on Monday they could feel the pinch when interest rates start rising again, especially those whose debt loads will no longer be affordable. Interest rate hikes will be based on inflation, Carney said, but the Bank of Canada hasn’t ruled out raising them to discourage people from taking on too much debt. “While the bar for further changes remains high,” he said, “the bank has the responsibility to draw the appropriate lessons from the experience of others who, in an environment of price stability, reaped financial disaster.” Debt, Carney argued, represents one of the most daunting challenges to the economic recovery. “The crisis is not over, but has merely entered a new phase,” he said. “In a world awash with debt, repairing the balance sheets of banks, households and countries will take years. As a consequence, the pace, pattern and viability of global economic growth is changing, and Canada must adapt.”

CBC News

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