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China’s credit to GDP gap remains higher, at 26.3 per cent, according to Monday’s report, but Canada’s 17.4 per cent figure is up from last fall and well above the closely watched BIS threshold of 10 per cent.

The report notes that two-thirds of banking crises were preceded by credit-to-GDP gaps that breached the 10 per cent threshold during the three years before the event.

Canada’s relatively large “property price gap” was also noted in Monday’s BIS review.

Other countries including Germany, some in central and eastern Europe, Greece, Japan, and Portugal were put in the same category, but the BIS said high property price gaps in the latter three countries doesn’t necessarily indicate vulnerabilities because it is being driven by price growth returning to “normal” levels after long periods of decline.

The report said debt service ratios are at manageable levels for most countries provided there are no changes to interest rates. However, Canada is flagged alongside China and Turkey as countries that face “potential risks” under more stressed conditions that assume a 250 basis point increase in rates.

The debt service ratio for Canada would jump to 7.9 from 3.6 in such a scenario, according to the BIS report. That’s the second highest among 22 countries measured, lagging only China.

The global banking body cautioned that its interest rate sensitivity figures are not the result of a “proper stress test,” and noted that a rise in rates would take time to translate into higher debt service demands.