There is uncertainty about whether there is a housing bubble in Canada. If it ‎existed, whether it’s bursting would a) occur, b) be gentle, or c) be sudden and ‎disruptive.  And then there’s the big question, what should one do?‎

This is a particular concern for financial system regulators who face a complex ‎balancing act, including several issues:‎

• Ensuring that markets are acting rationally (i.e. not showing sustained large ‎distortions like bubbles).‎
  
• Ensuring that firms in those markets are acting sensibly (i.e. not taking risks ‎that weaken themselves unduly, or, worse, the overall system.‎
  
• Helping consumers and society to benefit from a generally stable, ‎dependable banking system. ‎

There is a debate going on in the industry over whether more regulations, ‎guidelines and supervision are appropriate, or whether those actions may ‎themselves trigger more issues.  One conversation is around proposed guidelines ‎for mortgage renewals, which might make some mortgage holders ineligible for ‎renewal even if they never missed a payment (say, if their financial circumstances ‎had deteriorated).  While some argue the change is reasonable, others argue that ‎that regulatory change could, by itself, trigger more defaults.