Canadian banks have seen an increase in U.S. retail creditlosses, but "deterioration in credit quality" is not so much to blameas normalization, said Chief Risk Officer Mark Chauvin. Credit losses had been at"unsustainably low levels" from 2014 to 2015, he remarked, accordingto transcripts of the NationalBank Financial Canadian Financial Services Conference on March 31.
Meanwhile, 'sprovisions for credit losses have historically been below-peer, and Chief Risk Officer SurjitRajpal attributed this to lending decisions that were not particularly relianton rating agencies or a desire to boost regulatory capital.
Rajpal also touched on creditconcerns in the energy sector. But with several of BMO's highest executiveshaving previously gone through the oil-and-gas cycles, he said the potentialslowdown in global growth was the bigger worry. Over at Toronto-Dominion Bank,it was cybersecurity. Chief Risk Officer Mark Chauvin remarked on theobvious need for precautions such as dual authentication, but pointed to aCanadian marketplace — both merchants and customers — unready for change. And,when it was RBC CapitalMarkets CEO DougMcGregor's turn to admit what keeps him up at night, he highlighted the"astounding," "game changing" size of regulatory fines.