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CANADIAN INDUSTRY ONLINE - AUGUST/SEPTEMBER 2012
ment bonds have declined to record
lows, and the volume of bond issuance
has remained robust. Canadian banks
continue to be well positioned to lend,
with ready access to relatively low-
cost funding across the term structure
in both Cana-
dian and foreign
currencies. The
Bank’s latest Se-
nior Loan Officer
Survey (available
on the Bank’s
website under
Publications and
Research > Peri-
odicals > SLOS
2012
Q2) and the
balance of opin-
ion of Canadian
firms surveyed in
the Bank’s sum-
mer Business Outlook Survey (avail-
able on the Bank’s website under Pub-
lications and Research > Periodicals >
BOS Summer 2012) together suggested
little change in business lending con-
ditions in recent months, following
several quarters of persistent easing.
In the context of these broadly favour-
able financing conditions for Canadian
firms, the growth of overall business
credit has picked up to a rate above its
historical average. Growth in short-
term business credit has been particu-
larly strong, while growth in long-term
business credit has remained moder-
ate. These developments are consistent
with the ongoing solid growth in busi-
ness investment and the ample avail-
ability of internal funds owing to the
strong balance-sheet positions of non-
financial firms. Al-
though household
credit also contin-
ues to be readily
available at near
record low rates,
the pace of growth
in household credit
has slowed some-
what since the latter
part of 2011. None-
theless, this follows
an extended period
of rapid growth in
household credit,
and the particularly
strong activity in the housing market
seen early in 2012 suggests some re-
acceleration in mortgage credit in the
near term.
Compared with the unusu-
ally rapid pace observed in late 2011,
growth in the narrow monetary aggre-
gates has moderated in recent months,
consistent with reduced liquidity pref-
erence. Growth in the broad monetary
aggregates has been moderate over
the same period, suggesting relatively
subdued inflation pressures ahead.
“
Although household credit
also continues to be readily
available at near record low
rates, the pace of growth in
household credit has slowed
somewhat since the latter
part of 2011.”
“
The particularly strong
activity in the housing mar-
ket seen early in 2012 sug-
gests some re-acceleration
in mortgage credit in the
near term.”
BANK OF CANADA
