Financial Sector Update for 09/13/2016: BMO.TO, NA.TO, RY.TO, CM.TO, BNS.TO, TD.TO
BMO Capital Markets Tuesday said in light of OSFI's release of a draft for Capital Adequacy Requirements
in 2017, it expects Canadian regulators to allow ample transition time for adapting to any new rules.
BMO said the planned changes regarding mortgages emphasize the due diligence of mortgage originators with respect to the requirements of insurance contracts. Simply put, they appear to be geared towards limiting the risk of mortgage insurers (CMHC) by putting more scrutiny on bank due diligence processes on origination. The broker would expect this to have greater impact on banks with higher exposures to Canadian Personal and Commercial banking. That said, BMO believes the "Big 6" all have strong credit review and due diligence processes that would prevent them from much additional capital associated with insured mortgage originations.
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