Housing and debt risks best addressed by government; rates blunt tool: Poloz
VANCOUVER — Bank of Canada governor Stephen Poloz says risks from household debt and the housing market will be better addressed by the government’s recent policy moves, not by adjusting interest rates.
In a speech in Vancouver, the head of Canada’s central bank said adjusting interest rates is a “very blunt tool,” which has widespread effects.
“Our view is that these so-called macroprudential policies are best placed to deal with threats to financial stability because they can be designed to target specific financial vulnerabilities,” Poloz said Tuesday.
“Given all the work done to strengthen the global financial system over the past few years, it makes even more sense to separate monetary policy from efforts to stabilize the financial system.”