December 15, 2015 / 5:53 PM / in 2 years

BRIEF-Bank of Canada's Poloz: economic positives will dominate in 2016

Dec 15 (Reuters) - Bank of Canada’s Poloz holds a press conference following the release of the Financial System Review.

* BoC’s Poloz: there has been some negative data since two weeks ago but also some positive data, including housing

* BoC’s Poloz: economic positives will dominate in 2016

* BoC’s Poloz: there remain quite a number of possible ways for authorities to adjust mortgage and financing rules to reduce housing and debt vulnerabilities

* BoC’s Poloz: any housing price decline in Vancouver or Toronto should not affect housing markets elsewhere; would be primarily a local phenomenon

* BoC’s Poloz: any U.S. Fed rate hike would be in context of a solid U.S. economy, which is important for Canadian exports

* BoC’s Poloz would expect to see Canadian bond yields rise if Fed raises rates; that would be taken into account in BoC’s economic forecasts in January

* Bank of Canada’s Wilkins: Canada doesn’t have the same fundamentals that led to the U.S. housing crash in 2007

* Poloz: effects of BoC’s two rate cuts this year are still working through the system, along with the positive effects that there are of lower prices

* BoC’s Poloz: should expect a divergence in monetary policy between Canada and U.S., as economies diverge to some extent as well

* Poloz says BoC was fully consulted on Friday’s mortgage rule changes by finance department; those changes are constructive

* BoC’s Poloz expects Canadian economy to gain momentum through 2016 and into 2017

* Poloz: Recent momentum in housing prices in Toronto/Vancouver may increase likelihood of price correction but base case scenario remains constructive

* BoC’s Poloz: economic activity is still more or less in line with previous Bank of Canada forecasts

* BoC’s Poloz: 2015 is another year in the series of serial disappointments; recovery taking longer because of shock Canada is going through

* BoC’s Poloz: it’s welcome that there are targeted measures that can address pockets of vulnerabilities in housing market, without using blunt instruments

* Bank of Canada’s Wilkins: bank doesn’t see evidence of “excessive supply responses” in Vancouver and Toronto housing markets

* BoC’s Poloz, asked about possible Fed rate hike, says flexible exchange rate is a stress reliever as monetary policy diverges internationally

* BoC’s Poloz: there is no comparison, no similarity, between U.S. housing/banking situation before housing crash in 2007, and the Canadian situation For story, see (Reporting By Leah Schnurr)

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