The Federal Accountability Office has warned that Canadian banks are likely to fail the federal credit risk assessment test when it comes to their “sociically responsible” banking sector.

“The risk-averse banking sector is one of the most dangerous sectors in Canada,” said Fauci, chair of the Auditor General’s Office.

“Banks must be more financially responsible.”

Canada’s Financial Stability Board (FSB) has also found that “significant risks remain for systemic risk in the financial services sector,” despite the government’s promise to end “predatory practices.”

“Banks need to improve their risk management to protect consumers, and make sure they have the tools they need to do so,” Faucci said.

Canada has taken steps to reduce the financial risk of its banks since 2009.

The financial regulator is also looking into “an issue with the quality of a new automated clearinghouse,” but Faucci says that the government needs to address the “systemic risks” that banks face.

More to come.