axe wrote:You mean like this? 
The following were hard to miss.
Even Barack Obama, on the eve of a visit last year to Ottawa, the Canadian capital, admitted: “In the midst of the enormous economic crisis, I think Canada has shown itself to be a pretty good manager of the financial system and the economy in ways that we haven’t always been.”
The admiration of BHO is not a thing you should want.
...Canadians are either too nice or too dull to indulge in the no-holds-barred, plundering capitalism that created such a spectacular boom, and eventual bust, in more aggressive societies. A senior official in Ottawa likes to say that Canadian bankers are “boring, but in a good way. ....Some of them – including the chief executive of the Royal Bank of Canada, the country’s largest bank – have never even been to Davos. According to Matt Winkler, editor-in-chief of Bloomberg News, “Canadians are like hobbits. They are just not as rapacious as Americans.”
“Canada is a more egalitarian society; Canadians are less hierarchical. In the US, you can tell people to do something. In Canada, you have to ask them to do something – and hope they will do it!”
I met Kevin Lewis, a 44-year-old investment banker wearing a navy suit, plaid flannel shirt, but no tie, with a shaven head. Lewis used to work at Lehman Brothers, one of Wall Street’s most aggressive firms, until it went bankrupt. “I don’t want to sound condescending to Canadians,” he said, “but there is a ‘being nice’ mentality that exists in the institution.
The hilarity of canadian culture shaping banking aside, the second half of the article does indicate why canadian banks were insulated from the international banking crisis; they were not competiting in that market as a result of regulation.
Lloyds, Citibank and DB were part of the international expansion, and caught the same diseases as the balance of the international market. Canadian government kept canadian banks on a short local leash.
As David Dodge puts it, “You had a set of banks that had essentially very profitable domestic commercial banking franchises. They had to be pretty bad in their other businesses to lose money overall.”
That isn't the product of full on international competition.
The heart of the franchise – and probably the true key to the stability of the Canadian financial sector – is mortgages. Unlike many of the economies that were hardest hit by the crisis, particularly the US and the UK, Canada has a highly restrictive mortgage market. All mortgages with less than a 20 per cent down payment must be insured. Adjustable-rate and interest-only mortgages are practically unheard of. One obvious result is a more robust mortgage market:
It also means a less expansive market. The US mortgage market used to look like the canadian one, but Barney Frank didn't like it that way. In this respect the US mortgage crisis isn't primarily a consequence of US culture. It is an indirect result of US politics.
“We are extremely non-capital-intensive,” TD’s Ed Clark told me. “That is because of the regulatory regime. If we were an American bank I couldn’t do it. I would be forced up the yield curve.”
So canadian capital isn't as productive because that is how canadian government wants it. That's a choice, but not likely optimal.
Last edited by zukiphile (2010-02-02 11:18:33)
“Despotism tempered by assassination, that is our Magna Carta”
