Royal Bank of Canada CEO Dave McKay told a banking convention in New York on March 5 that U. S. customer debt is being revalued due to the steady maturities of U. S. 30-year loans, while customers in Canada, Australia and the U. K. are forced to do so. then. renew on the upper levels.
Canadian banks are appreciating about 15 per cent of their existing consumer loan portfolios, he told the RBC Capital Markets Financial Institutions Conference, adding that these are giant shocks that reduce consumers’ disposable income.
McKay had in the past seen surprise loan repayment as the main cause of Canada’s poor performance.
“This contradicts an underlying slowdown in the Canadian economy, the U. K. economy and the Australian economy, largely due to the difference in customer behavior,” he said.
McKay said the current business cycle is a unique phenomenon in which consumers are saddled with debt while employment remains high.
“So I think, from that point of view, it’s unique and it’s helping us organize a softer landing,” he added.
“The U. S. economy is outperforming, but inflation is low, so it’s working. “
• Email: dpaglinawan@postmedia. com
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