A majority of investment dealers and portfolio managers are concerned about the stability of the Canadian financial system amid deteriorating economic and financial conditions, according to a survey by the Canadian Securities Administrators (CSA).
The CSA’s first annual survey of dealers and portfolio managers on the subject of systemic risk, which was carried out between mid-October and mid-November, found that 60% were “somewhat” to “very” concerned about the stability of the financial system.
The level of concern among respondents had either increased over the past year (40%) or held steady (59%), the CSA noted.
“Respondents were most concerned about rising interest rates, household debt, the housing market, the geopolitical environment and cyber vulnerabilities,” the regulators reported.
Rising rates topped the list of industry worries, cited by 67% as a “high” to “very high” risk, and by 95% as at least a “moderate risk.”
Additionally, the CSA noted that more than 75% of respondents pointed to household, government and corporate debt levels as at least a “moderate risk.” A similar proportion saw “excessive risk taking” as at least a moderate risk as well.
“The results of this survey provide CSA members with important information regarding the level of concern market participants have about financial stability risks in Canada,” said Stan Magidson, chair of the CSA and chair and CEO of the Alberta Securities Commission, in a release.
“We appreciate the strong industry response to this inaugural survey, especially as our sector navigates factors such as rising interest rates, inflationary pressures and geopolitical risks,” he added.