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A new report from one of the world's top financial institutions is reiterating its warning that Canada is one of the countries most likely to see a financial crisis, due to excessive borrowing. The Bank for International Settlements (BIS), known as the "central bank of central banks," also says Canada's economy would have a hard time absorbing any substantial increase in interest rates — a warning that comes just after the Bank of Canada hiked rates twice. What the Bank of Canada interest rate hike means for you:

The BIS found that a key indicator of financial crisis is flashing red in Canada. The level of all Canadian private debt outside the financial sector is 11.3 per cent above its long-run norm, in the second quarter of this year. That's down from 14.1 per cent in the previous report, but any number above 10 per cent indicates a heightened risk of a crisis within three years. "Early warning indicators for stress in domestic banking systems ... continue to signal vulnerabilities in some jurisdictions," the BIS said. Relative to their historic norms, debt levels "stand above critical thresholds in Canada, China and Hong Kong SAR."

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