Flaherty says up to banks to "fix" mortgage market
By Nicole Mordant
VANCOUVER (Reuters) - Canada's finance minister said on Wednesday he would rather not tighten mortgage rules again to curb high household debt and that banks themselves are taking on that job by becoming more strict with their lending criteria.
Jim Flaherty said he has seen signs of moderation in the Toronto condominium market and expects to see a similar trend in Vancouver, one of the country's hottest real estate markets.
"Part of that is based on what I'm being told by people who build condominiums, and also what I'm being told by some of our banks about their standards becoming more stringent with respect to their loans for condominium development," Flaherty told reporters in Vancouver after making a speech there.
Flaherty said it was up to markets to "fix" the housing and debt problem, not the government.
"I've tightened up the mortgage insurance market three times ... I really don't want to do it again," he said.
"And I'm glad that some of the banks - at least one of the bank executives yesterday indicated that he agreed that actually the banks should exercise prudence and not rely on government to do it for them," he said.
Bank of Nova Scotia (BNS.TO: Quote) Chief Executive Rick Waugh said on Tuesday that the simmering housing market gives reason for caution, but that it's up to the country's banks, rather than the government, to manage the risks of their massive mortgage portfolios.