Vancouver Bank Employee – “The senior executive explained that the banks have leveraged up the Canadian citizenry to unsustainable levels.”

Here a banker gives precisely the same warning that a small minority (us included) have been sounding for some time — Canadian citizens are dangerously overly indebted. The unwinding of this debt, as implied by the banker’s intent, will lead to a deflationary wave, where consumers have far less money at hand. The Canadian asset class most vulnerable to such a change is real estate, and Vancouver’s RE is the most vulnerable in the country. – vreaa

Rob, a Vancouver bank employee, wrote an e-mail to Garth Turner that was discussed at greaterfool.ca [19 July 2010]. Here’s the extracted anecdote –

“I am a certified financial planner working for an excellent Canadian bank in Vancouver. Although the mantra by branch managers to the Account Managers and bank staff is still (to quote what I heard from one of them) “park your morals at the door”, what is important is that there is acknowledgment at the top of the house that things will begin to change. I had a meeting yesterday with a senior executive out of Toronto who said some staggering things that I thought I would NEVER hear from anyone in the top echelons of the banking industry.  He explained that executives have been meeting together and advising the board of directors that what the bank has been doing for the last 5 years to generate profits cannot continue.  He explained that the banks have leveraged up the canadian citizenry to unsustainable levels. He said that going forward (here is the best part) we have a MORAL obligation to provide the right advice to Canadians regarding their spending habits, budgeting, retirement, investing and borrowing desires.  I was shocked!  This was the first time I had heard a Banker expose the truths of what is going on in Canada right now and take ownership of the fact they have been dangling the carrot and enticing the population into perpetual debt.”

3 responses to “Vancouver Bank Employee – “The senior executive explained that the banks have leveraged up the Canadian citizenry to unsustainable levels.”

  1. Thank God there is no subprime lending in Canada and everyone paid 20% cash down to buy their house. Euh… Wait…

  2. I wonder just how bad things are when realtors start cold calling by knocking on my door during dinner to tell me about what’s going on the neighbourhood (West Vancouver). Her face lit up when we said we said were renters. Almost felt a bit sad for her….didn’t have the heart to tell her we sold all our real estate in 2008 and don’t plan on buying again for quite some time.

  3. Pingback: “I wonder just how bad things are when realtors start cold calling by knocking on my door during dinner to tell me about what’s going on in our West Vancouver neighbourhood.” « Vancouver Real Estate Anecdote Archive

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