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A comment on Most Canadians Are Now Better Off Than Most Americans. Parent comment

Re:Most Canadians Are Now Better Off Than Most Americans by Mikeb85 on Friday August 30, 2019 @01:43PM (#20840766)
I wouldn't say it's that precarious. Interest rates are near all-time lows and banks here are risk-averse, meaning they don't give out risky loans.

Edit - also secured loans are less risky than unsecured loans. Your article includes housing in 'debt'.

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Re:Most Canadians Are Now Better Off Than Most Americans by bryanlarsen on Friday August 30, 2019 @03:01PM (#20841540)
When the bubble bursts, the banks probably won't need bailing out, so that won't trigger a recession like happened in 2008.

But a huge number of Canadians being underwater on their mortgage will make for a drastic decrease in consumer spending, which may trigger a recession...

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Re:Most Canadians Are Now Better Off Than Most Americans by lgeorget on Friday August 30, 2019 @01:48PM (#20840813)
Is a loan deemed not risky by the bank necessarily not risky for the loaner? (That's a genuine question, I have no clue)
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Re:Most Canadians Are Now Better Off Than Most Americans by appleiigs on Friday August 30, 2019 @02:45PM (#20841374)
Yes and No.

Yes - if a billionaire borrower buys a $200,000 house with a mortgage, there is little repayment risk for both borrower and banks. The mortgage payments are unlikely to stress the borrower.

No - that risk can be distributed between bank and borrower. Bank provides 75% of the value of the house, so it takes more risk. However, it can reduce risk in variety of ways, including: 1) taking collateral, 2) taking a guarantee from borrower, 3) diversification, 4) off loading risk to 3rd parties.

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Re:Most Canadians Are Now Better Off Than Most Americans by AstralStorm on Friday August 30, 2019 @01:53PM (#20840865)
No. Banks have a much higher risk threshold and can repossession you. They are diversified, have qualified financial staff (mostly) and more.

Neutral side is generally considered "best effort" in the axis.

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Re:Most Canadians Are Now Better Off Than Most Americans by mistermann on Friday August 30, 2019 @02:18PM (#20841099)
More importantly, they're backed by the CMHC so they don't have to concern themselves with risk.

https://www.cmhc-schl.gc.ca

And if there's a crisis large enough that solvency of CMHC might be questionable, they don't have to worry either because the bank of Canada will gladly buy their mortgages, passing the risk onto taxpayers.

https://www.macleans.ca/economy/business/the-real-canadian-b...

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Re:Most Canadians Are Now Better Off Than Most Americans by Mikeb85 on Friday August 30, 2019 @01:58PM (#20840916)
That ignores the fact that the government regulates what kind of loans banks can make to individuals.
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Re:Most Canadians Are Now Better Off Than Most Americans by Mikeb85 on Friday August 30, 2019 @02:00PM (#20840933)
Yes, mostly. The government regulates what kind of loans banks can make to individuals.
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