International Banking - Annual Overview
HOUSEHOLD DEBT COMPARISON
• In comparable terms, Canadian debt-to-income is 12% below where it peaked in the U.S.
。 In the last 7 years, increases in Canadian debt-to-income ratio have slowed vs 2002-2010
。 On same terms, Canada's debt-to-income is 156% vs 140% in the U.S.
• Canadian debt-to-assets ratio remains below U.S.
o U.S. households have incentive to pursue higher asset leverage in light of mortgage interest deductibility
Debt is a stock concept, to be financed over one's lifetime. Income is a flow concept measuring
one single year's earnings. Debt should be compared to lifetime or permanent income, or assets
Household Credit Market
Debt to Disposable Income
180
household credit liabilities
as % of disposable income
Total Household Liabilities
30
As % of Total Assets
household debt
as % of assets
160
140
120
100
80
60
25
20
Adjusted
Canadian
15
Adjusted US
Official
Canadian
90 92 94 96 98 00 02 04 06 08 10 12 14 16
Sources: Scotiabank Economics, Statistics
Canada, BEA, Federal Reserve Board.
10
US
Canada
90 92 94 96 98 00 02 04 06 08 10 12 14 16
Sources: Scotiabank Economics, Statistics
Canada, Federal Reserve Board.
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