The financial health of large businesses appears solid, but smaller businesses are showing more signs of financial stress.
Overall, evidence suggests households can continue servicing debt at higher rates.
An increase in insolvency filings by smaller firms could be a normalization after years of below-average filings as pandemic supports expire.
In non-bank financial sector, some firms are increasing their use of leverage to fund trading activities; which makes them more vulnerable to large market swings
Overall credit performance of canadian banks remains strong.
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