After commenting on the potential housing bubble in Canada, ING Direct Canada President Peter Aceto said it is unnecessary for Ottawa to tighten its mortgage rules.
"High level, one-stroke fixes are too simple, and can have a very large impact," said Mr. Aceto. "I worry about government-based tightening of the mortgage rules creating a much worse reaction – too fast of a cooling, which is not really good for anyone."
Mr. Aceto also said that banks can tighten rules themselves and there is no need for Canada’s Finance Minister Jim Flaherty to "make the decision for them."
His statement came out along with warnings from Derek Holt and Karen Cordes, both economists from Scotia Capital, who predicted that a housing bubble would form last year.
"You can’t go from 100 km/h to zero in a nanosecond without suffering harsh consequences," they wrote. "Newton’s third law is the best caution that can be served up with respect to abruptly altering Canadian mortgage rules as per some of the whisper talk leading up to the March 4 federal budget after the current government sharply liberalized the mortgage market in early 2007."