2013-36 CIBC's mortgages are insured

The CIBC has a fast growing mortgage business. After the Great Recession and its aftermath, this raises concerns about what can happen if the economy gets worse and borrower default rises.

No worries, says the CIBC. Our mortgages are insured. If borrowers default, we get the insurance payments.

This comment shows that Canadian banks learned a lesson from the Great Recession in the U.S.

A couple of comments:
1. So who will pay the insurance? You, that is who. Mortgages are insured with the Canada Mortgage and Housing Corporation (CMHC), a government entity. Banks pay for insurance so it should be ok, unless things get very bad.
Note, however, that CHMC is earning a profit. So we get a profit, and a tail risk.
2. The problem during the Great Recession was adverse selection and lower lending standards. This is a bank-centered article and it does not say a word about whether CIBC is maintaining high lending standards.