BoC’s Cote says debt distributions useful in gauging systemic risk
A deputy governor of the Bank of Canada, Agathe Cote, addressed the issue of measuring systemic risk in a speech on August 21 in Ontario, outlining how using aggregate indicators alone is ineffective and that distributions are important in assessing risks.
Cote discussed the central bank's household risk assessment model, which estimates how different households respond to shocks depending on their level of debt. This approach paints a more cautionary picture than the aggregate statistics do
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