CMHC PASSES BIG DISASTERS TEST
Canada Mortgage and Housing Corp. says its mortgage loan insurance and securitization businesses are stable enough to withstand several extreme scenarios. In its annual stress test, the housing agency says its capital holdings are sufficient to weather against severe financial stress, a sustained low oil price and a global trade war. It says it would also be able to fare well against a cyber attack on a Canadian financial institution, an earthquake and a major volcanic eruption. “As a responsible risk manager, we seek out extreme almost unimaginable situations and ask ourselves ‘What if?”’ said Steve Mennill, the agency’s chief risk officer. “That’s the goal of our stress testing, to measure how we would stand up to these unlikely shocks.” He told a conference call Tuesday that CMHC is in a “better position” now than it was last year to fare against these scenarios.