The governor of the Bank of Canada has stressed there is a need for the central bank to "sharpen" the distinction between different household vulnerabilities in its latest financial stability report.

"This separation is important, since although they often go hand-in-hand, it is possible that over time one of them will diminish more than the other," Stephen Poloz said. The key distinction is between household indebtedness and housing market imbalances.

The bank has always presented a separation