The federal debt-to-GDP ratio has fallen to about 44 per cent, from close to 70 per cent at its peak. The ratio of total government liabilities to GDP has declined from a peak of about 100 per cent to about 80 per cent, according to the OECD. And Canada’s Triple-A credit rating has been restored.
The strong belief of investors in the implicit government backing of the GSEs does not by itself create safety and soundness problems for the GSEs, but it does create systemic risks for the U.S. financial system as the GSEs become very large.