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Bank of Nova Scotia
Symbol BNS
Shares Issued 1,227,027,624
Close 2018-12-12 C$ 72.23
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Globe says BMO, rivals hear Citi warn of looming crisis

2018-12-13 08:14 ET - In the News

See In the News (C-BMO) Bank of Montreal

The Globe and Mail reports in its Thursday, Dec. 13, edition that Canada risks a financial crisis within three years, a Citigroup report warns. The Globe's Ian McGugan writes that several other countries are also vulnerable, according to the Citi report titled, "Are we headed for a global debt crisis?" It estimates that governments, households and corporations around the world have amassed a mountain of loans about three times as large as the level of 20 years ago. "The world is primed for a debt crisis," write Citigroup analysts. In Canada, households have gone on a borrowing binge, in large part because of soaring home costs. Canada's energy producers, manufacturers and other non-financial companies have also gone deeper into hock as prices for oil and other commodities have faded. The combination of high household debt and elevated borrowing among non-financial companies has boosted the private sector's debt-service ratio. Citigroup says, "Canada's current debt-service ratio suggests risk of financial crisis within three years, by our estimates." It warns that rising rates could pose a particular threat to Canada, as well as Norway, Sweden, Australia and the Netherlands.

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