The Bank of Canada's latest Financial System Review, out today, says the global and domestic situation is better than it was six months ago, but the arrival of the end of an extraordinarily easy monetary policy still poses risks.

In Canada, a high level of household indebtedness and imbalances in some segments of the housing market make Canadians vulnerable to an adverse macroeconomic shock and a sharp correction in the housing market, the review says.

In the world's advanced economies, the