The Globe and Mail reports in its Friday edition that the Bank of Canada warns that President Donald Trump's erratic tariff agenda could disrupt financial markets. The Globe's Mark Rendell writes that while domestic financial stability concerns have eased as interest rates fell and household debt declined, worries over U.S. protectionism have emerged as a new risk, highlighted in the BOC's annual Financial Stability Report. After the release of the FSR BOC Governor Tiff Macklem said: "In the near term, the unpredictability of U.S. trade policy could cause further market volatility and strains on liquidity. ... In an extreme case, market volatility could turn into market dysfunction." Meanwhile, an escalation of trade hostilities that pushed the Canadian economy into a severe recession could put pressure on the country's banking system, Mr. Macklem warned. "With debt still at high levels, some households and businesses may be unable to keep up with payments. If loan losses occur on a large enough scale, banks could cut back on lending in response." He said this is not a forecast, but rather a chance for the BOC to express its concerns and encourage financial market participants to manage their riskier positions.