Striking evidence of Canada’s financial security comes from the fact that Canada, alone in the industrialized world, has not faced a single bank failure, call for bailout or government intervention in the financial or mortgage sectors. In 2008, the World Economic Forum ranked Canada’s banking system the healthiest in the world. The U.S. ranked 40th, Britain’s 44th.
What accounts for the genius of Canadians? Common sense. Over the past 15 years, as the U.S. and Europe loosened regulations on their financial industries, the Canadians refused to follow suit, seeing the old rules as useful shock absorbers. Canadian banks are typically leveraged at 18 to 1 – compared with U.S. banks at 26 to 1 and European banks at a frightening 61 to 1. Partly this reflects Canada’s more risk-averse business culture, but it is also a product of old fashioned rules on banking.
ARTICLE QUOTED FROM SCOTIABANK