Yesterday’s local newspaper, West Hawaii Today, featured the top headline: Oh, Canada! Nation’s Economy Suddenly the Envy of the World.
The story reports: “The 20 world leaders at an economic summit in Toronto next weekend will find themselves in a country that has avoided a banking crisis where others have floundered, and whose economy grew at 6.1 percent annual rate in the first three months of this year.”
The article particularly notes that, “there was no mortgage meltdown or subprime crisis in Canada. Banks don’t package mortgages and sell them to the private market so they need to be sure their borrowers can pay back the loans.”
Grrr! Lucky so-and-so’s, who could've ever thought of running banks like that?
“The banks are stable because, in part, they’re more regulated. As the U.S. and Europe loosened regulations on their financial industries over the last 15 years, Canada refused to do so.”
Well, yearh, if you're gonna cheat! How are U.S. banks supposed to compete with that?
“The banks also aren’t as leveraged as their U.S. or European peers.”
I’m going to go out on a limb here and take a guess that Canadian banking system laws aren’t written by former Goldman Sachs executives now embedded in their nation's government.
“Our banks were better managed and we had better regulations,” says former Prime minister Paul Martin, the man credited with killing off a massive government deficit in the 1990’s when he was finance minister, leading to 12 straight years of budget surpluses.”
World leaders have noticed: President Barack Obama says the U.S. should take note of Canada’s banking system…”
Yeah, well, I wouldn’t recommend anyone holding his breath waiting for that to happen.