The Bank of Canada has highlighted elevated household debt and imbalances within the nation’s real estate market as the two chief vulnerabilities to the financial system in the event of a recession, Bloomberg News reported. But what could trigger such a downturn? Macquarie Capital Markets offers one simple answer: the housing market itself -- highlighting that the share of employment tied to construction as well as finance, insurance and real estate is nearly two standard deviations above its long-term average.

The Bank of Canada is paying more attention to smaller lenders as an area of potential risk in the financial system, a shift that comes amid concerns about a national housing slowdown, The Wall Street Journal reported. The central bank said it is looking to broaden the scope of its in-house stress testing to include smaller financial institutions and mortgage insurers, at a time when tighter mortgage rules are helping to drive some of those lenders’ growth.

The International Monetary Fund moved on Friday to formally begin negotiations on a bailout of Argentina, without any objection from the Trump administration, The Wall Street Journal reported. The crisis in Argentina has prompted the U.S. to once again embrace the type of multilateral and global institutions that have often come under heavy criticism from the Trump White House. IMF Managing Director Christine Lagarde presented the program Friday in Washington to the IMF’s executive board, where the U.S.

A U.S. bankruptcy court is set to hear a dispute involving Brazilian telecoms company Oi SA and major shareholder Bratel Brasil SA, Bratel said on Wednesday, as investor discontent with Oi’s bankruptcy reorganization process shows no signs of abating, Reuters reported. On Friday, Bratel, a subsidiary of Portugal’s Pharol SGPS SA, which owns almost 28 percent of Oi’s common shares, said it had filed a legal complaint in the United States.

While money managers from Goldman Sachs Group Inc. to UBS Wealth Management still tout investing opportunities in emerging markets, the asset class has one notable critic: Harvard professor Carmen Reinhart. The Cuban-born economist points to mounting debt loads, weakening terms of trade, rising global interest rates and stalling growth as reasons for concern, Bloomberg News reported.

Sears Canada Inc. pension plan members are facing bleak prospects for getting their full pension payouts, according to a Toronto bankruptcy lawyer, Benefits Canada reported. “They won’t be made whole, regardless of how we look at this,” says Lou Brzezinski, a partner at Blaney McMurty LLP.

An investment fund that’s seeking a payout from the Cuban government on more than $1.3 billion in defaulted debt and back interest has hired the lawyer who won a settlement for hedge funds in a long-running legal battle against Argentina, Bloomberg News reported. CRF I Ltd. contracted Matthew McGill, a partner with Gibson, Dunn & Crutcher, to represent it in its claim against Cuba “including potential litigation,” according to a letter from the firm provided to Bloomberg News by a fund investor.

In a related story, the International New York Times reported that Canada's Fairfax Financial Holding has placed a bid of $300 million to buy Toys R Us's Canadian operations in bankruptcy. According to court papers filed late Thursday, the bidder is taking on a role of a "stalking horse" in a court-approved auction set for Monday in New York. That means it could be outbid in the auction if other buyers come in with a higher offer.

Offshore oil driller Seadrill plans to emerge from Chapter 11 bankruptcy in late June or early July to catch the rising wave of rig market activity, its chief executive told said on Wednesday. The company won U.S. court approval on Tuesday for its multi-billion dollar debt restructuring plan after reaching a deal with more than 40 banks, unsecured creditors and shipyards, Reuters reported. “The confirmation is the most significant milestone in the process, and now we need to implement the plan over 60 to 90 days.

The world’s $164tn debt pile is bigger than at the height of the financial crisis a decade ago, the IMF has warned, sounding the alarm on excessive global borrowing, the Financial Times reported. The fund said the private and public sectors urgently needed to cut debt levels to improve the resilience of the global economy and provide greater firefighting capability if things went wrong. “Fiscal stimulus to support demand is no longer the priority,” the IMF said on Wednesday in a report published at its spring meetings in Washington.