October 18, 2017 - 9:10 AM
OTTAWA - Canada Mortgage and Housing Corp. says stress testing has confirmed its mortgage loan insurance and securitization businesses are able to withstand a severe shock.
The housing agency tested the strength of its businesses against several extreme scenarios.
It looked at the impact of an earthquake in a major urban centre, a steep drop in the price of oil and a U.S.-style housing correction where unemployment rises along with a fall in house prices of 30 per cent.
CMHC also examined an anti-globalization scenario that included a rise in protectionism, widespread use of tariffs and a euro-zone break-up.
The agency began publicly releasing its stress test results in 2015.
CMHC provides mortgage loan insurance for home buyers as well as securitization guarantee programs to help financial institutions.
News from © The Canadian Press, 2017