June 2022

OPR-Canadian banks reduce reserve of future bad debts as economic risks increase

Canadian banks wrapped up the second-quarter earnings season last week, with highs reporting better-than-expected earnings, largely thanks to reduced budget amounts they set aside for long-term credit losses, raising questions among investors and analysts about whether they are too positive about the looming risks. “Recessions start when the economy is at its peak,” said Brian Madden, chief investment officer at First Avenue Investment Counsel. (positive) economic situation and underweight the probability of adverse situations, which does not seem to me to be an excessive risk. “

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