Financial Stability Report—2026

A stable and efficient financial system is essential for sustaining economic growth and raising standards of living. In the annual Financial Stability Report, the Bank of Canada assesses the resilience of the Canadian financial system and focuses on key risks that could undermine its stability.

Data available as: CSV, JSON and XML Available as: PDF

Overall assessment

Canada’s financial system has continued to function well despite US tariffs and trade uncertainty. But a more turbulent global environment poses risks to financial stability, particularly if several vulnerabilities crystalize at the same time.

Financial markets

The war in the Middle East has led to periods of increased volatility and reduced liquidity in certain markets, particularly in energy. Nevertheless, markets have generally remained resilient. Equity valuations are still elevated, and credit spreads are compressed.

Households

Overall, Canadian households have proven resilient. But debt levels are elevated, and some pockets of stress remain. The potential impact on employment from ongoing trade uncertainty and geopolitical conflicts is a key concern.

Non-financial businesses

Canadian businesses remain in good financial shape overall, but risks are building. Trade uncertainty and geopolitical tensions could create new stress for some firms.

Banks

Canada’s large banks have grown more resilient. They remain well positioned to support the economy and the financial system even if conditions deteriorate.

Non-bank financial intermediaries

Hedge funds have continued to increase their repo borrowing. While their activity supports market efficiency and liquidity, it could leave fixed‑income markets more vulnerable to the risk of a sudden sell‑off.

In focus

How a financial market correction could worsen the effects of an oil shock

The war in the Middle East has pushed up oil prices, putting pressure on inflation. In a situation where geopolitical tensions trigger a severe tightening in financial conditions, the resilience of the financial system could be tested.

A resilient repo market is important for financial stability

Repo markets are crucial for the functioning of government bond markets. They are also an important source of short-term funding. But their size and widespread use mean they can transmit financial stress if conditions deteriorate.

Rapid growth in private credit has created vulnerabilities

Globally, private credit lending has expanded rapidly and become increasingly connected to the broader financial system. Complex structures, limited transparency and the fact that private credit is untested in a downturn make it difficult to predict how the sector might amplify shocks.

The Financial Stability Report is a product of the Governing Council of the Bank of Canada: Tiff Macklem, Carolyn Rogers, Toni Gravelle, Sharon Kozicki, Nicolas Vincent and Michelle Alexopoulos.

In brief: Financial Stability Report

Learn more about the Bank of Canada’s framework for assessing financial stability. Our Valet API is designed to help you integrate your applications and processes with our data. For details, please see our documentation.

Release of the Financial Stability Report

Press conference following the release of the Financial Stability Report. Content Type(s): Opening statements, Press, Speeches and appearances

Press Conference: Financial Stability Report—2026

Release of the Financial Stability Report — Press conference by Senior Deputy Governor Carolyn Rogers and Deputy Governor Toni Gravelle (11:00 (ET) approx.). Content Type(s): Press, Speeches and appearances, Webcasts

Financial System Survey highlights—2026

This article presents the key results from the 2026 Bank of Canada Financial System Survey, conducted between February 23 and March 13. The survey included a special section on the use and risks of artificial intelligence (AI). Content Type(s): Financial System Survey, Publications

ISSN 1705-1304 (Online)