It has done so, in part, because the debt has become more concentrated in highly leveraged households, especially those whose ability to service their debt may be more vulnerable to an economic downturn. Our assessment, therefore, of this vulnerability depends not only on the magnitude of the debt but also on its distribution.
However, the Canadian financial system is very resilient and could withstand the triggering of this vulnerability. And public authorities in Canada have taken appropriate measures to mitigate it. Moreover, this vulnerability should stabilize as the economy and household incomes strengthen and interest rates normalize. The Bank is, nonetheless, concerned about high household debt and will continue to monitor it closely.