Twice a year, the Bank publishes the Financial System
Review, which presents an assessment of the nature
and locus of financial risks in Canada. The June 2014
edition of this publication examined the implications
of record-high household debt levels and modelled the
macroeconomic impacts of a potential sharp decline
in housing prices and/or significant increases in longterm interest rates. Under either of these scenarios, the
economy would suffer and many Canadians would
be faced with painful adjustments. For the first time
in at least 50 years, household debt levels relative to
household income in Canada now exceed those in
the United States. The combination of high household
debt and more than a dozen years of relatively buoyant
Canadian housing markets has become a major
concern for central bank policy-makers in Ottawa.
the
distribution of banknotes.
• Managing aimscreation and Canadians with physical
The Bank
to provide
banknotes that they can use with a high degree of
confidence.4 In its management of notes, a principal
objective of the Bank is to discourage and minimize
counterfeiting. Beginning in the 1990s, Canada saw
a steady rise in the production and use of counterfeit
banknotes, a trend that prompted responses from both
the central bank and law enforcement authorities. The
new series of polymer notes