The Globe and Mail reports in its Wednesday edition that on Tuesday Carolyn Rogers, the assistant superintendent for regulation at the Office of the Superintendent of Financial Institutions, showed no sign of wavering in the regulator's conviction that a new mortgage stress test has been a necessary check on loose lending. The Globe's James Bradshaw writes that Ms. Rogers said escalating home ownership costs and the knock-on impact on Canada's economy are "a problem that is proving very challenging to address." She defended the regulator's stress test -- which has made it harder for some borrowers to qualify for mortgages -- by arguing that the answer to the problem "cannot be more consumer debt fuelled by lax underwriting standards." OSFI had been concerned that some lenders were focusing too much on a home's collateral value, and not enough on the borrower's ability to repay the loan.
She said: "We look at, what has it done to underwriting standards in banks, and in that sense, we're pleased with what it's done. It's been effective, it's done what we intended it to do, it's tightened up the mortgage underwriting standards, it's made banks more prudent." The stress test came into force at the start of 2018.
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