{"id":44898,"date":"2023-03-02T21:33:46","date_gmt":"2023-03-03T02:33:46","guid":{"rendered":"https:\/\/prefblog.com\/?p=44898"},"modified":"2023-03-02T21:33:46","modified_gmt":"2023-03-03T02:33:46","slug":"march-2-2023","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=44898","title":{"rendered":"March 2, 2023"},"content":{"rendered":"

The European inflation report<\/a> was mixed:<\/p>\n

Consumer prices in the 20 countries that use the euro as their currency rose at an annual rate of 8.5 percent in February, down slightly from January\u2019s rate of 8.6 percent. Year-over-year rates have been declining since reaching a peak 10.6 percent in October.<\/p>\n

But some of the largest economies showed troubling increases, and core inflation \u2014 a measure that excludes the most erratic categories like food and energy \u2014 rose to a record high of 5.6 percent in February, from 5.3 percent.<\/p><\/blockquote>\n

Interesting things are happening with mortgages<\/a>:<\/p>\n

New data from CIBC show that $52-billion worth of mortgages \u2013 the equivalent of 20 per cent of the bank\u2019s $263-billion residential loan portfolio \u2013 were in a position where the borrower\u2019s monthly payment was not high enough to cover even the interest portion of the loans. The bank has allowed these borrowers to stretch out the length of time it takes to pay off the loan, which is known as the amortization period. As well, borrowers are adding unpaid interest onto their original loan or principal.
\n…<\/b>
\nCIBC\u2019s filing, for the first quarter that ended in January, is the only one to provide increased transparency on the impact of higher interest rates on its variable-rate portfolio. The same filing said that in the fourth quarter, $39-billion worth of mortgages were negatively amortizing. That grew to $52-billion in the first quarter, said the footnote in the filing. Last summer, the bank said its borrowers were not yet putting unpaid interest onto the principal.
\n…<\/b>
\nThe most recent quarterly filings from the big banks show that a chunk of their mortgage loans have amortization periods of more than 30 years.<\/p>\n

At BMO, the proportion of residential mortgages with amortization periods longer than 30 years reached 32.4 per cent in January. At CIBC, the percentage was 30 per cent. At TD it was 29.3 per cent and at Royal Bank of Canada, it was 25 per cent, according to their regulatory filings.<\/p><\/blockquote>\n

BIS has released<\/a> a bulletin by Sarah Bell, Michael Chui, Tamara Gomes, Paul Moser-Boehm and Albert Pierres Tejada titled Why are central banks reporting losses? Does it matter?<\/a>:<\/p>\n

Key takeaways<\/p>\n