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“These new capital requirements, if implemented, will provide greater certainty that risks associated with residential mortgages are adequately capitalized for,” Mercer said, adding that this should reduce concerns about the impact of a housing downturn.

In his June report, Mercer estimated that a housing crash in Canada could result in combined losses of more than $17 billion for Canadian banks and mortgage insurers.

The new OSFI rules for mortgage insurers are to come into effect Jan. 1, with possible revisions, following the consultation period that ends Oct. 21.

“We expect that higher capital requirements in markets where mortgage-to-income ratios are particularly high will lead to increases in premium rates in those markets,” said Paul Holden, an analyst at CIBC Capital Markets, in a note to clients.

Genworth MI Canada Inc., the parent company Canada’s largest private residential mortgage insurer, issued a statement Friday that said the company expects it will compliant with the new framework, “subject to business and market conditions.”

The mortgage insurer estimates its pro forma minimum capital test ratio as of June 30 at between 153 per cent and 156 per cent, above OSFI’s target of 150 per cent.

“In addition, the company held $175 million of cash and investments as of June 30, 2016 and has access to a $100 million credit facility that is undrawn,” Genworth said in the statement, which added that these funds “could be used to enhance the capital of Genworth Canada.”