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The Bank of Montreal is starting to see “early indications” that Toronto’s overheated housing market is “cooling,” executives said Wednesday.

While the Ontario government’s plan to rein in soaring house prices in Canada’s biggest city is still in its early days, BMO chief financial officer Tom Flynn said there are “signs that their policies might have the desired effect.”

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“Some of the feedback from the people that we have on the ground is that activity levels from a pricing perspective look like they might be a little less robust than they’ve been,” Flynn said in an interview. “So we would view that as a positive thing,”

The comments came as BMO reported its fiscal second-quarter results, the first of Canada’s big banks to release its earnings for the period ended on April 30.

Although concerns about the domestic banking market have been rising — Moody’s Investors Service downgraded the debt ratings of several of the country’s largest banks earlier this month over escalating housing prices and increasingly indebted consumers — it was deteriorating credit quality in BMO’s commercial portfolio south of the border that weighed down its results.