The Globe and Mail reports in its Tuesday edition that Moody's Investors Service says it believes the country's biggest lenders can easily withstand a U.S.-style mortgage crisis. The Globe's David Berman writes, however, that the credit-rating agency raised concerns about the big banks' vulnerability to broader issues, such as record-high consumer indebtedness and the knock-on effects from less-regulated lenders. In a simulation, Moody's used a 25-per-cent slump in house prices nationally, along with another 5-per-cent depreciation in the supercharged markets of Ontario and British Columbia. Foreclosure and collection costs were assumed at 10 per cent. Under these conditions, Moody's estimated total system losses would be $18-billion, of which about two-thirds would be borne by banks. It said bank capital levels would slump, likely prompting regulators to require banks to issue additional shares. However, Moody's believes lenders would recover from losses associated with a sharp housing downturn in as little as three months. Given its size, Royal Bank of Canada would suffer the biggest overall losses. CIBC, though smaller, would suffer the biggest hit to its capital levels.