The Financial Post reports in its Thursday, May 16, edition that investors are too bearish on how much a slowing Canadian economy will impact the country's bank stocks, says a new outlook report by Canaccord Genuity. The Post's John Shmuel writes that the Canaccord report says, "In our view, the only logical way to justify the current discount valuation applied against Canada banks (relative to the insurers and relative to historical levels) is if one is making the call that materially higher unemployment in Canada will drive consumer loan growth to something approaching 0 per cent and credit losses materially higher." The level of bearishness has discounted Canadian banks beyond even the country's life insurance companies, which do not have the financial soundness and record of dividend growth that the banks do. Canadian banks have a higher dividend yield than life insurers (4.2 per cent versus 4 per cent), and Canaccord expects the banks to increase their yield to 5 per cent by early 2014. While the Canadian economy will undoubtedly cool, Canaccord says there is no evidence Canada's unemployment rate will go much higher meaning the current discount is unjustified.