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<\/a><\/p>\nPhoto: James Bombales<\/em><\/p>\n An executive with one of the biggest Canadian banks is questioning the judgement of the Bank of Canada\u2019s governor over his comments about bankruptcies<\/a> in the country.<\/p>\n When Stephen Poloz announced this week that the central bank was maintaining the overnight rate at 1.75 percent, signalling mortgage rates should remain consistent for the time being, he noted bankruptcies are on the rise<\/a>.<\/p>\n\n But that\u2019s not the case, says Derek Holt, vice president of Scotiabank Economics, and it\u2019s one of the things that differentiates our banking system from America\u2019s.<\/p>\n \u201cI don\u2019t see consumer bankruptcies the same way as the Governor and was somewhat surprised by how the Governor is viewing bankruptcies given the importance of tracking how they are responding to higher rates and other developments,\u201d writes Holt in a Scotia Flash report<\/a>.<\/p>\n \u201cPoloz says consumer bankruptcies have gone up. They have not,\u201d he adds bluntly.<\/p>\n Recently, the Office of the Superintendent of Bankruptcy reported that consumer insolvencies were up 5.2 per cent in November on a year-over-year basis.<\/p>\n However, this measure is based on more than bankruptcies. It also includes proposals for restructuring debt (basically, a proposal for a repayment plan that may include asking a creditor for more time to pay off debt, or offering to pay a certain percentage of the total owed).<\/p>\n \u201cTotal insolvencies have risen because proposals have gone up, and they are a very different animal compared to going bankrupt,\u201d Holt explains. \u201cBankruptcies are still toward record lows.\u201d<\/p>\n<\/a><\/p>\n