Dominion Lending Centres Clearlease Reports Bank of Canada warns pension funds of risky buys
VANCOUVER, BC (May 20, 2011) Clearlease Reports The Bank of Canada warned on Thursday May 1, 2011 that Canadian pension funds and insurance companies could be tempted to invest in risky assets in order to fulfill expectations of obtaining decent returns.
Timothy Lane, deputy governor at the central bank, said institutional investors are often expected or required to deliver a target rate of return.
In an environment where interest rates are still at extraordinarily low levels following the global financial crisis, the only way to achieve certain targets is by taking on extra risk, which can be rewarded by higher yields, Lane said in a speech in Vancouver, British Columbia, to an audience of professionals in the pension industry.
“This is a particular instance of the ‘search for yield’ that often accompanies a long period of very low interest rates,” he said.
“It may be associated with excessive credit creation and undue risk-taking as investors seek higher returns, leading to the underpricing of risk and unsustainable increases in asset prices,” he said.
Lane said new risks to the financial system were emerging as a result of a two-speed global economic recovery in which emerging markets are growing robustly and starting to raise interest rates to cool their economies while growth in advanced economies remains sluggish and rates still very low.
In addition, sovereign debt problems could indirectly threaten Canadian banks even though direct exposure to peripheral European countries is small. Debt problems elsewhere could hit Canada through higher funding costs and a decline in asset price valuations.
Canadian banks emerged from the global crisis unscathed and without need of bailouts. But policymakers say it’s too early to declare victory.
The Canadian central bank is busy developing new tools and models for assessing these emerging risks and Lane urged increased vigilance by policymakers elsewhere as well.
“The influence of sustained low interest rates in major advanced economies on risk-taking behavior is a powerful dynamic that bears watching,” he said.
Lane made no reference to current monetary policy in his speech. In answers to questions from the audience he repeated the bank’s already-stated view that the impact on inflation from high oil prices will be short-lived.
“Certainly energy prices have risen and that has been reflected, as we expected it to, in a run-up in overall inflation,” Lane said.
“That’s something that we expect to have a temporary effect on inflation as it passes through to the overall price level, but as we’ve seen so, far core inflation remains well anchored.”
The bank is widely expected to keep interest rates on hold at 1.0 percent on May 31, its next policy announcement date, and resume tightening in the second half of this year.
For more information please visit us at: http://www.clearlease.com/Career-Opportunities.html
About Dominion Lending Centres Clearlease
Dominion Lending Centres Clearlease Commercial (DLC Clearlease/Clearlease.com) is a fully diversified Lease Finance Mortgage Banking Brokerage Company specializing in Equipment Leasing, Automobile Leasing, Residential, Commercial Lending/Mortgage Financing. DLC Clearlease possesses the capability to accommodate financing needs ranging from a small second Home Mortgage to a Multi-Million Dollar Commercial Projects. No mortgage is too small or too large for this integrated Company.
Equipment Lease Financing in Vancouver, Surrey, Delta, Richmond, Langley, New Westminster, North Vancouer, West Vancouver, B.C. Also offering Automobile Lease Financing and Mortgage information. Founded by the Pidgeon brothers.
You may have recently seen a Dominion Lending advertisement on such media outlets as: Global News, CTV News, CBC Television, Rogers Sportsnet or possibly heard the great Don Cherry, a Canadian Sports legend, discuss Dominion Lending Centres.
Contact DLC Clearlease.com:
Dominion Lending Centres Clearlease
HEAD OFFICE, Bentall Two, Suite 900, 555 Burrard Street, Vancouver, BC, V7X 1M8, CANADA.
Mr. Alexander Pidgeon, Editor in Chief
Tel: (604) 696-1221 ext. 199
eMail: [email protected]
Website: http://www.clearlease.com
News: http://clearlease.com/category/equipment-lease-blog/feed/rss
Twitter: @clearlease
###
Video Link: http://youtu.be/f_kk7WJa7Uk
VANCOUVER, BC (May 20, 2011) Clearlease Reports The Bank of Canada warned on Thursday May 1, 2011 that Canadian pension funds and insurance companies could be tempted to invest in risky assets in order to fulfill expectations of obtaining decent returns.
Timothy Lane, deputy governor at the central bank, said institutional investors are often expected or required to deliver a target rate of return.
In an environment where interest rates are still at extraordinarily low levels following the global financial crisis, the only way to achieve certain targets is by taking on extra risk, which can be rewarded by higher yields, Lane said in a speech in Vancouver, British Columbia, to an audience of professionals in the pension industry.
“This is a particular instance of the ‘search for yield’ that often accompanies a long period of very low interest rates,” he said.
“It may be associated with excessive credit creation and undue risk-taking as investors seek higher returns, leading to the underpricing of risk and unsustainable increases in asset prices,” he said.
Lane said new risks to the financial system were emerging as a result of a two-speed global economic recovery in which emerging markets are growing robustly and starting to raise interest rates to cool their economies while growth in advanced economies remains sluggish and rates still very low.
In addition, sovereign debt problems could indirectly threaten Canadian banks even though direct exposure to peripheral European countries is small. Debt problems elsewhere could hit Canada through higher funding costs and a decline in asset price valuations.
Canadian banks emerged from the global crisis unscathed and without need of bailouts. But policymakers say it’s too early to declare victory.
The Canadian central bank is busy developing new tools and models for assessing these emerging risks and Lane urged increased vigilance by policymakers elsewhere as well.
“The influence of sustained low interest rates in major advanced economies on risk-taking behavior is a powerful dynamic that bears watching,” he said.
Lane made no reference to current monetary policy in his speech. In answers to questions from the audience he repeated the bank’s already-stated view that the impact on inflation from high oil prices will be short-lived.
“Certainly energy prices have risen and that has been reflected, as we expected it to, in a run-up in overall inflation,” Lane said.
“That’s something that we expect to have a temporary effect on inflation as it passes through to the overall price level, but as we’ve seen so, far core inflation remains well anchored.”
The bank is widely expected to keep interest rates on hold at 1.0 percent on May 31, its next policy announcement date, and resume tightening in the second half of this year.
For more information please visit us at: http://www.clearlease.com/Career-Opportunities.html
About Dominion Lending Centres Clearlease
Dominion Lending Centres Clearlease Commercial (DLC Clearlease/Clearlease.com) is a fully diversified Lease Finance Mortgage Banking Brokerage Company specializing in Equipment Leasing, Automobile Leasing, Residential, Commercial Lending/Mortgage Financing. DLC Clearlease possesses the capability to accommodate financing needs ranging from a small second Home Mortgage to a Multi-Million Dollar Commercial Projects. No mortgage is too small or too large for this integrated Company.
Equipment Lease Financing in Vancouver, Surrey, Delta, Richmond, Langley, New Westminster, North Vancouer, West Vancouver, B.C. Also offering Automobile Lease Financing and Mortgage information. Founded by the Pidgeon brothers.
You may have recently seen a Dominion Lending advertisement on such media outlets as: Global News, CTV News, CBC Television, Rogers Sportsnet or possibly heard the great Don Cherry, a Canadian Sports legend, discuss Dominion Lending Centres.
Contact DLC Clearlease.com:
Dominion Lending Centres Clearlease
HEAD OFFICE, Bentall Two, Suite 900, 555 Burrard Street, Vancouver, BC, V7X 1M8, CANADA.
Mr. Alexander Pidgeon, Editor in Chief
Tel: (604) 696-1221 ext. 199
eMail: [email protected]
Website: http://www.clearlease.com
News: http://clearlease.com/category/equipment-lease-blog/feed/rss
Twitter: @clearlease
###
Video Link: http://youtu.be/f_kk7WJa7Uk
Dominion Lending Centres Clearlease Reports Bank of Canada warns pension funds of risky buys
VANCOUVER, BC (May 20, 2011) Clearlease Reports The Bank of Canada warned on Thursday May 1, 2011 that Canadian pension funds and insurance companies could be tempted to invest in risky assets in order to fulfill expectations of obtaining decent returns.
Timothy Lane, deputy governor at the central bank, said institutional investors are often expected or required to deliver a target rate of return.
In an environment where interest rates are still at extraordinarily low levels following the global financial crisis, the only way to achieve certain targets is by taking on extra risk, which can be rewarded by higher yields, Lane said in a speech in Vancouver, British Columbia, to an audience of professionals in the pension industry.
“This is a particular instance of the ‘search for yield’ that often accompanies a long period of very low interest rates,” he said.
“It may be associated with excessive credit creation and undue risk-taking as investors seek higher returns, leading to the underpricing of risk and unsustainable increases in asset prices,” he said.
Lane said new risks to the financial system were emerging as a result of a two-speed global economic recovery in which emerging markets are growing robustly and starting to raise interest rates to cool their economies while growth in advanced economies remains sluggish and rates still very low.
In addition, sovereign debt problems could indirectly threaten Canadian banks even though direct exposure to peripheral European countries is small. Debt problems elsewhere could hit Canada through higher funding costs and a decline in asset price valuations.
Canadian banks emerged from the global crisis unscathed and without need of bailouts. But policymakers say it’s too early to declare victory.
The Canadian central bank is busy developing new tools and models for assessing these emerging risks and Lane urged increased vigilance by policymakers elsewhere as well.
“The influence of sustained low interest rates in major advanced economies on risk-taking behavior is a powerful dynamic that bears watching,” he said.
Lane made no reference to current monetary policy in his speech. In answers to questions from the audience he repeated the bank’s already-stated view that the impact on inflation from high oil prices will be short-lived.
“Certainly energy prices have risen and that has been reflected, as we expected it to, in a run-up in overall inflation,” Lane said.
“That’s something that we expect to have a temporary effect on inflation as it passes through to the overall price level, but as we’ve seen so, far core inflation remains well anchored.”
The bank is widely expected to keep interest rates on hold at 1.0 percent on May 31, its next policy announcement date, and resume tightening in the second half of this year.
For more information please visit us at: http://www.clearlease.com/Career-Opportunities.html
About Dominion Lending Centres Clearlease
Dominion Lending Centres Clearlease Commercial (DLC Clearlease/Clearlease.com) is a fully diversified Lease Finance Mortgage Banking Brokerage Company specializing in Equipment Leasing, Automobile Leasing, Residential, Commercial Lending/Mortgage Financing. DLC Clearlease possesses the capability to accommodate financing needs ranging from a small second Home Mortgage to a Multi-Million Dollar Commercial Projects. No mortgage is too small or too large for this integrated Company.
Equipment Lease Financing in Vancouver, Surrey, Delta, Richmond, Langley, New Westminster, North Vancouer, West Vancouver, B.C. Also offering Automobile Lease Financing and Mortgage information. Founded by the Pidgeon brothers.
You may have recently seen a Dominion Lending advertisement on such media outlets as: Global News, CTV News, CBC Television, Rogers Sportsnet or possibly heard the great Don Cherry, a Canadian Sports legend, discuss Dominion Lending Centres.
Contact DLC Clearlease.com:
Dominion Lending Centres Clearlease
HEAD OFFICE, Bentall Two, Suite 900, 555 Burrard Street, Vancouver, BC, V7X 1M8, CANADA.
Mr. Alexander Pidgeon, Editor in Chief
Tel: (604) 696-1221 ext. 199
eMail: [email protected]
Website: http://www.clearlease.com
News: http://clearlease.com/category/equipment-lease-blog/feed/rss
Twitter: @clearlease
###
Video Link: http://youtu.be/f_kk7WJa7Uk
