19:02
The strength of the Canadian banking sector is helping the country overcome the crisis
The headlines these are distressing days. You can not open a newspaper without reading once again a bank in one country or another, asked the government to bail it out, while others put the key in the door. However, when the global financial system through this difficult period, it is important to consider the situation of foreign banks relative to banks in Canada. These distinctions directly and positively affect the ability of our economy to overcome crises.
See the situation in the United States. Recently, the Economist magazine suggested the possibility that more than 1,000 banks go bankrupt in the U.S. over the next five years if the situation were to deteriorate. For now, bank lending in the United States is less available, banks enroll losses, government tax revenues fall, the U.S. government must come to the rescue of banks and lax banking regulation is strongly criticized.
Contrasts with the situation in Canada
Although banks in Canada are not completely spared, they benefit from the strength and stability of the foundations of a national banking system. Our banks continue to offer credit - in fact, loans to businesses by banks increased by almost 11% in January 2009 compared to January 2008. The Canadian banking sector is profitable and will continue to be an important source of revenue for the Government of Canada, contributing to the financing of social programs popular with Canadians.
Moreover, no bank in Canada has needed financial assistance from the government and no pressure was exerted on it so that it frees the banks from their bad debts. Instead, the federal government has implemented the program to purchase mortgages insured under which it buys from banks and mortgage quality, safe and insured to inject liquidity into the credit market, and this the benefit of taxpayers.
Such a healthy banking system, strong and stability is essential to the long-term prosperity of Canada, no matter where you live. In 2007, Quebec, banks have contributed to the provincial GDP at a rate of 2.76% and employed nearly 42,000 people. The strong presence of banks serves as a valuable anchor for economic recovery.
A growing number of Canadians are aware and continue to place great confidence in our banking sector. A survey conducted in late 2008 by The Strategic Counsel on behalf of the Canadian Bankers Association (CBA) revealed that 77% of Canadians describe the Canadian banks as being safer and more stable than the banks' abroad.
Prudence, management and regulation
According to this study, three main factors explain the confidence that our banking sector inspires Canadians: the prudence of banks' loans and investments, improved management of domestic banks compared with banks abroad and government regulation of the banking sector .
It is true that we have not a single body of securities regulators. However, overall, our regulatory regime has broad support from people like U.S. President Barack Obama, former Federal Reserve Chairman Paul Volcker U.S. and many other observers. We can conclude that the banking model is best able to overcome economic crisis seems more like red and white than red, white and blue.
And the world looks to Canada for advice on how to get out of the current banking crisis. The Federal Finance Minister Jim Flaherty is working closely with its G20 counterparts to help stabilize the global banking system. The Governor of the Bank of Canada, Mark Carney, and the Superintendent Julie Dickson, participate actively in the efforts with their counterparts around the world, like the CEO of Scotiabank, Rick Waugh, through his work at the Institute of International Finance. Collectively and individually, the efforts of those Canadians and others accolent Financial Services of Canada label strength and reputation abroad.
A serious concern persists, however: the distinctive approach of Canada does lose in the race towards a new global regulation of international organizations or in a wave of international regulations excessive, unnecessary and inappropriate? Or will we rise to new approaches that would reflect the elements that made the Canadian system so strong? We can not allow a race to the regulatory epidermal crush us.
Maintain balance
Canada's approach - a balance between the close monitoring of solvency, and prudent management of banks and competition - has allowed its financial system to meet its commitments. Given the role played by the banking sector in stabilizing our economy, we should defend this distinctive Canadian approach.
In our view, it is essential that each country determines what changes are needed in its legislation now rather than waiting for a world body imposes new rules. We strongly support the adoption of internationally agreed standards, but no country should give up its ability to set its own standards, even in matters of capital adequacy and risk management. Instead, the development of these standards must be consistently and transparently in every country.
Much remains to be done and the bankers of Canada must continually demonstrate the many strengths of our banking and financial system, and maintain the trust of our customers. The banking sector in Canada is the challenge, helping to sustain our economy and establishing global leadership at a time when many countries face not only difficult, but are looking for models.
See the situation in the United States. Recently, the Economist magazine suggested the possibility that more than 1,000 banks go bankrupt in the U.S. over the next five years if the situation were to deteriorate. For now, bank lending in the United States is less available, banks enroll losses, government tax revenues fall, the U.S. government must come to the rescue of banks and lax banking regulation is strongly criticized.
Contrasts with the situation in Canada
Although banks in Canada are not completely spared, they benefit from the strength and stability of the foundations of a national banking system. Our banks continue to offer credit - in fact, loans to businesses by banks increased by almost 11% in January 2009 compared to January 2008. The Canadian banking sector is profitable and will continue to be an important source of revenue for the Government of Canada, contributing to the financing of social programs popular with Canadians.
Moreover, no bank in Canada has needed financial assistance from the government and no pressure was exerted on it so that it frees the banks from their bad debts. Instead, the federal government has implemented the program to purchase mortgages insured under which it buys from banks and mortgage quality, safe and insured to inject liquidity into the credit market, and this the benefit of taxpayers.
Such a healthy banking system, strong and stability is essential to the long-term prosperity of Canada, no matter where you live. In 2007, Quebec, banks have contributed to the provincial GDP at a rate of 2.76% and employed nearly 42,000 people. The strong presence of banks serves as a valuable anchor for economic recovery.
A growing number of Canadians are aware and continue to place great confidence in our banking sector. A survey conducted in late 2008 by The Strategic Counsel on behalf of the Canadian Bankers Association (CBA) revealed that 77% of Canadians describe the Canadian banks as being safer and more stable than the banks' abroad.
Prudence, management and regulation
According to this study, three main factors explain the confidence that our banking sector inspires Canadians: the prudence of banks' loans and investments, improved management of domestic banks compared with banks abroad and government regulation of the banking sector .
It is true that we have not a single body of securities regulators. However, overall, our regulatory regime has broad support from people like U.S. President Barack Obama, former Federal Reserve Chairman Paul Volcker U.S. and many other observers. We can conclude that the banking model is best able to overcome economic crisis seems more like red and white than red, white and blue.
And the world looks to Canada for advice on how to get out of the current banking crisis. The Federal Finance Minister Jim Flaherty is working closely with its G20 counterparts to help stabilize the global banking system. The Governor of the Bank of Canada, Mark Carney, and the Superintendent Julie Dickson, participate actively in the efforts with their counterparts around the world, like the CEO of Scotiabank, Rick Waugh, through his work at the Institute of International Finance. Collectively and individually, the efforts of those Canadians and others accolent Financial Services of Canada label strength and reputation abroad.
A serious concern persists, however: the distinctive approach of Canada does lose in the race towards a new global regulation of international organizations or in a wave of international regulations excessive, unnecessary and inappropriate? Or will we rise to new approaches that would reflect the elements that made the Canadian system so strong? We can not allow a race to the regulatory epidermal crush us.
Maintain balance
Canada's approach - a balance between the close monitoring of solvency, and prudent management of banks and competition - has allowed its financial system to meet its commitments. Given the role played by the banking sector in stabilizing our economy, we should defend this distinctive Canadian approach.
In our view, it is essential that each country determines what changes are needed in its legislation now rather than waiting for a world body imposes new rules. We strongly support the adoption of internationally agreed standards, but no country should give up its ability to set its own standards, even in matters of capital adequacy and risk management. Instead, the development of these standards must be consistently and transparently in every country.
Much remains to be done and the bankers of Canada must continually demonstrate the many strengths of our banking and financial system, and maintain the trust of our customers. The banking sector in Canada is the challenge, helping to sustain our economy and establishing global leadership at a time when many countries face not only difficult, but are looking for models.
source : cyberpresse.ca
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