PMs and dealers share biggest concerns in CSA risk survey

Canadian Securities Administrators polled more than 600 Canadian portfolio managers and investment dealers for its inaugural annual report

By Steve Randall

The concerns that Canadian portfolio managers (PMs) and investment dealers have about financial risks have been revealed in a new report.

The inaugural annual systemic risk survey from the Canadian Securities Administrators polled more than 600 wealth professionals from across Canada in October and November to assess their views.

It found that rising interest rates, household debt, the housing market, the geopolitical environment and cyber vulnerabilities were the top responses.

More than 60% of respondents said they were at least somewhat concerned about the stability of the Canadian financial system and four in ten said this concern had increased since last year, although most had a stable level of concern.

The levels of household, government, and corporate debt were cited by more than three quarters of participants as at least a moderate risk, as was excessive risk taking.

Crypto assets
Crypto assets, climate change, and stock liquidity were among the areas with above-average levels of respondents saying they were low risk, although still less than half of those polled. These topics were also among those with the lowest level feeling they are high risk.

The participants were split at 42% each on whether fintech disruption is low or moderate risk.

“The results of this survey provide CSA members with important information regarding the level of concern market participants have about financial stability risks in Canada,” said Stan Magidson, CSA Chair and Chair and CEO of the Alberta Securities Commission. “We appreciate the strong industry response to this inaugural survey, especially as our sector navigates factors such as rising interest rates, inflationary pressures and geopolitical risks.”

Source: WealthProfessional