Canada's banking system healthiest in the world

Canada's banking system healthiest in the world

Canada's banking system is a model for the United States and European countries struggling to cope with mountains of debt accumulated through a series of market crises, massive bailouts and recession according to a report in the Washington Post this morning.

The International Monetary Fund and World Economic Forum (IMF) is showcasing Canada for having the healthiest banking system in the world. . The IMF, in probing what made Canada's mortgage lending system so resilient during the crisis, concluded that it was "boring" compared with the complicated, sophisticated and expensive financing system in the U.S., but nevertheless effective and safe.

Canada and its banks were barely touched by the 2008 financial crisis that nearly brought down the U.S. banking system and led to the biggest recession since the Great Depression.
Canadian bank losses were so low, and their cushion of reserves so high, that the banks managed to post profits for months in the aftermath of the 2008 crisis while major U.S. banks were teetering on the brink of insolvency and getting $250 billion in Treasury bailouts to cover burgeoning losses on bad mortgage loans.

"The Canadian experience showed that more prudent lending and borrowing played a big part in preventing the housing bubble that proved the near-undoing of the American banking sector," said Robert Elliott, a Canadian banking lawyer at Fasken Martineau.
Though major U.S. banks have been recapitalized by the government and are posting profits again, "all the fresh capital in the world may not prevent another cycle of misery down the road" unless the U.S. also adopts more prudent lending practices, he said

  • FJ 2010-06-02 1:34:37 AM
    Canadians were assuredly told, during the Chretien years, that it was critical to the survival and future competitiveness of our banks that they needed to merge with each other.

    So, had they merged and supposing that the logic behind the Chretien era PR was accurate, wouldn't they therefore now be many times healthier than simply the 'healthiest in the world'? And wouldn't they now be a 'super-model' for the Europeans and the Americans?
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  • TP 2010-06-02 3:26:52 AM
    Not sure who you are, but I don't understand your logic about merging the banks as you jump to conclusions with minimal knowledge of the industry and your not supporting your position with facts, only opinion. In order to preserve our banking status having healthy competition is crucial. Our banks are so efficient now, it's the primary reason that there hasn't been any real foreign banks making headway through bricks and mortar.
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  • FJ 2010-06-02 3:59:14 AM
    To TP: First, my comment in the post itself is not conclusion at all. It consists of two questions, civilly posed I might add.

    Second, you are take issue with my "jumping to conclusions"? What conclusions are those? I don't see that I've made any conclusions.

    Third, why come chasing the messenger with the pretext inherent in the comment "Not sure you are are...". Does it matter who I am? Mine are questions, that's all they are.

    This is a forum for open debate and the sharing of ideas.
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