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Moody's retains negative outlook on Canadian banks

Moody's is keeping its outlook on Canada's seven largestbanks negative, due to the expectation the Canadian government will this yearformalize bank recovery and resolution plans. The development would imply lesssupport for the industry.

The rating agency also expects still-low oil prices andinterest rates to respectively cause "modest deterioration" in assetquality and an increase in mortgage debt.

That said, Moody's acknowledged that the "banks benefitfrom a favorable domestic industry structure, hold significant pools ofhigh-quality liquid assets and have resilient internal capital generationcapabilities."