TORONTO — The head of Canada's banking regulator says that despite continued liquidity stress at some U.S. banks, he isn't seeing any data to suggest that a wider shock is going to re-emerge.
Superintendent of Financial Institutions Peter Routledge says it feels like the market has accepted that authorities have stabilized liquidity concerns.
Speaking to media after a speech at the Economic Club of Canada, Routledge cautioned that he isn't saying that the sector is fully in the clear, noting that the problem with shocks is you don't know when they're going to return.
His comments come as First Republic Bank has seen its stock price plummet this week after it disclosed that it saw more than US$100 billion of deposit outflows last month.
The San Francisco bank is one of several that saw knock-on effects of the collapse of Silicon Valley Bank, though wider contagion was limited after U.S. authorities agreed to backstop deposits at SVB.
Routledge says the recent banking issues show the importance of financial institutions building stable deposit franchises that last through the ups and downs.
This report by The Canadian Press was first published April 27, 2023.
The Canadian Press
