Canada will withstand concerns about the housing market because of its relatively strong global position, Bank of Nova Scotia Chief Executive Officer Richard Waugh said.

 

“The current concerns about Canada’s housing market are reason for caution but not pessimism,” said Waugh, according to the text of his speech at the bank’s 180th annual meeting today in Saskatoon, Saskatchewan. “We can and will manage through any potential problems.”

Waugh goes even further though, and suggests that Canadian family's economics remain solid, and that the housing market is supported by strong fundamentals. I agree with him here: when compared to our American counterparts, there is little for Canadians to grumble about. Unemployment is lower here, and there is no trend of the mortgage defaults as experienced abroad.

The BNS also thinks that it’s up to Canadian banks, and not government or regulators, to manage risks and advise clients appropriately.

Here's where I stop agreeing with ScotiaBank's CEO. The BNS thinks that banks have consumer interests at heart and that the government should leave them alone to keep their clients safe? Who are they kidding? 

Let's look at the facts: ScotiaBank had record annual profit last year of $5.27 billion, driven by increases in domestic and international consumer banking. Last month, the lender said net income in the fiscal first quarter rose 15 percent to C$1.44 billion.

I do not think that the banking sector should be deregulated. Deregulation was the main culprit of the US economic melt down. Lack of government oversight of the banking sector is criminal in my opinion. Certainly, the Canadian government should play a role in lending practices of the major banks in this country. Cautioning consumers to minimize their debt loads and encouraging them to save their equity is best set out by independent, and not-for-profit agencies.

Banks are in the business of earning profits for the benefit of their shareholders. They are motivated to make as much money from their clients and customers. We should never forget that they are not altruistic organizations.