Soon After We Sounded The Alarm, Canada’s Regulator Warns Local Banks Are Underreserved To Energy Losses

Jon Alternative Media, Banking, Blogosphere

Back in early February, Zero Hedge laid out what was the biggest crisis facing Canada’s banks: a chronic under reserving to potential (and soon, realized) oil and gas loan losses.
As we said nearly two months ago, “for Canada, it’s not only raining, it’s pouring for the country’s energy industry, a downpour which is about to migrate into its banking sector. Which is why it is indeed time to take a somewhat deeper dive into the Canadian banks’ balance sheets, where we find something very troubling, and something which prompts us to wonder if the time of freaking out about European banks is about to be replaced with comparable panic about Canadian banks.
The following chart from an analysis by RBC shows that when compared to US banks’ (artificially low) reserves for oil and gas exposure, Canadian banks are…not. Here is the one chart showing why the time to panic about Canadian banks may have finally arrived:

This post was published at Zero Hedge on 03/21/2016.