(Bloomberg) — The type of securities blamed for triggering a credit crisis in the U.S. a decade ago could now be part of the solution in Canada, where a cooling housing market is a key risk to its $1.7 trillion economy.
The Bank of Canada is discussing ways to encourage a more robust market for residential mortgage-backed securities with potential investors. Only about C$1.5 billion ($1.1 billion) of Canadian uninsured mortgages have been pooled in RMBS deals, or about 0.1% of the countrys mortgage debt, according to rating company DBRS Ltd. No lender has widely marketed such a deal since September, when private lender MCAP sold C$254 million of the notes.
While previous efforts to kick-start an RMBS market have borne little fruit, this t…
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