Gov't to tighten oversight of Canada Mortgage and Housing Corp.: Queen's Univ. expert
Queen’s University finance professor Louis Gagnon is available to talk about an expected announcement by the federal government about changes to the Canada Mortgage and Housing Corp.
Ottawa is considering placing CMHC under direct supervision of the Office of the Superintendent of Financial Institutions. There are concerns with CMHC because it is close to its mandated insurance limit of $600 billion because of the red-hot housing market and so-called portfolio insurance for the banks.
“I have been concerned about the CMHC for a long time. I believe that the federal government's plan to bring CMHC under the direct supervision of the Office of the Superintendent of Financial Institutions (OSFI) is long overdue. In fact, the previous oversight arrangement was ill-suited for this important task and I never did understand why the CMHC had been placed under the jurisdiction of the minister responsible for Human Resources and Skills Development. This was a recipe for a disaster,” says Dr. Gagnon, who specializes in debt and risk management. “OSFI is responsible for the oversight of insurance companies and it only makes sense to bring CMHC under it purview, since CMHC is the most systemically important insurance entity in the land and also the most vulnerable one.”
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