Conservative Ideas Can’t Escape Blame for the Financial Crisis

I think the USA absolutely should at least move closer to the Canadian model. It would be significantly more difficult for the USA to enforce due to the large amount of independent banks, but measure should be taken to move in that direction in any case. Consider these comments from Finance Minister Jim Flaherty in September 2010:

http://news.gc.ca/web/article-eng.d...D=&crtr.mnthStrtVl=&crtr.yrndVl=&crtr.dyndVl=

Jim Flaherty, Finance Minister of Canada, issued the following statement upon release of the World Economic Forum’s 2010-11 Competitiveness Report:

“I am very pleased to see the World Economic Forum has ranked Canada’s banking system as the soundest in the world for the third consecutive year.

“Canada’s banks and other financial institutions are sound and well-capitalized, and were less highly leveraged than their international peers heading into the financial crisis. In contrast to many other countries, none of Canada’s banks required bailouts. Even during the worst days of the credit crisis, our financial institutions’ health allowed them to continue to raise capital.

“The strength of our financial sector is the result of a sound regulatory regime, including capital requirements for financial institutions that are well above minimum international standards and higher than in many other jurisdictions, and a more conservative risk appetite among financial institutions.

“Regulation alone is not necessarily the answer to the problem. Many of the institutions that failed around the world were regulated. The key is effective supervision.

“In Canada we have a coordinated regulatory approach and that includes the Office of the Superintendent of Financial Institutions, the Bank of Canada, the Canada Deposit Insurance Corporation, the Financial Consumer Agency of Canada and the Department of Finance, all of whom work together in coordination to monitor macroeconomic issues.

“It’s no wonder that international leaders around the world praise Canada’s financial system as a model for others to emulate.

“Today’s ranking by the World Economic Forum is further evidence that Canada’s model does work and is an example to the world.”

 

Free Thinker and Kass 007

You guys have some valid points.

I would not have a problem with our banking system scrapping current laws, rethinking the rules and look at why Canada's banking system is sound.

I'm against any type of "SOCIALISM", I dislike the current Socialistic business climate in America.

But before we call for More Regulation, we need to address the fundamental principles of a "Free Market'.

Lending practices are out of control not because of less regulation but because of "Socialistic ideas" and Greed from the top.

However, due to the fact that 70% of our GDP is "consumers" the banking system is not going to change anytime soon, either Free Markets wise or "More Regulation" wise.

Basic fact, we will not survive the next 20s with GDP based on the consumer.

 

Hey, I am all for free markets as much as the next guy, but there are limits. A certain amount of regulation is necessary for confidence and fairness reasons, especially when it comes to an industry as important as the banking industry.

This is where I think your ideology is getting in the way of the facts with respect to the banking industry. We shouldn't dismiss an idea simply because it has traditionally been labelled as "socialistic." And I don't think we should confuse the current socialistic policies of the USA such as bailouts and healthcare with adequate regulation of the banking sector.

 

Canadian Banks are not sound at all.

Canada has 6 huge too big to fail banks and maybe the same number of small

Like many other industries in Canada banks organized oligopoly which makes profits good
During 2008 canadian government bought 100 bln in mortgages effectively bailing out canadian banks

although all mortgage debt is guaranteed by CHMC (sort of Freddie Mac). So banks can't lose on morgages.

Canadian central bank is afraid of C$ appreciation so they have rates below inflation. Debt bubble is in full rage, housing is on fire with prices at all time high
some say debt bubble is much worse than in US

Canadian government tries to stop bubble through regulation. Although not very successfully. Debt continues to rise.

As housing prices became unfordable hard landing in housing is quite probable. The soundness of banking system will be tested

The system works for now. Although long term stability questionable

 

What a stupid post. Honestly, you have absolutely no idea what you are talking about. There was no bailout of Canadian banks nor was there ever a need to consider one. Comparing Canadian economics to US economics is a joke honestly. Our banks are so healthy that they are buying up US assets to expand their businesses.

Your post helps illustrate just how bad the information gets on this board. Given the recent nature of this board it seems only natural to start seeing outright lies posted under the guise of analysis.

 

"SOCIALISM" do you live in America? seriously do you, seriously

50+ billion a year to politicians by corporations

80% of legislation written by lobbiest

increasing concentration of wealth ( socialism wealth evenly distributed)

Unions make up less then 7% of work force ( much higher in socialist countries)

Bankers and corporations get unlimited bailouts ( but states get nothing)

regulators come and go to the very same industry they regulate Corporations use first amendment to be able to lie to consumer while at the same time get court orders to keep from photographing their gulf oil spill.Meat industry got food "libel laws" passed which enables them to sue anyone who criticizes their products.
Even though fraud was identified in the recent debacle not one higher up has gone to jail.

California and Illinois are selling off the public domain (the reverse would happen in socialism)

While it's fun to listen to the glenn beck, ann coliter, ayn rand crowd socialism is as far away as democracy in america. The terms that best describe America would be

plutocracy: Ruled by the rich

Fascism: organize a nation according to corporatist perspectives

or my favorite and the most fitting with the info above

Kleptocracy: a term applied to a government subject to control fraud that takes advantage of governmental corruption to extend the personal wealth and political power of government officials and the ruling class

socialism has been highjacked from the right to make you fear your own rights and fair practices

 

I challenge you to produce one piece of evidence to support anything you said in this post, because quite frankly, it is all bullshit.

 

The collapse of the US economy began in 1999 when Congress passed (overwhelmingly by Democrats and Republicans) the repeal of the Glass-Steagall Act that had, since 1933, separated legitimate banking activities from risky investment activities. On top of that, both Democrats and Republicans supported lowering credit standards so that more people could buy homes. The problems were so big and so obvious that in September of 1999, an article in the New York Times (http://query.nytimes.com/gst/fullpage.html?re60) predicted the banking collapse that began in 2007.

When the politicians took down the firewall, the house burned to the ground.

Quotes from 1999 NYT article:

-- In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run in to trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980s.

-- From the perspective of many people, including me, this is another thrift industry growing up around us,said Peter Wallison a resident fellow at the American Enterprise Institute. If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.

 

It's not like getting a job at a prop firm. The government doesn't hire just anyone.

 

Considering how the "notorious" Canadian stock exchanges operate I'd say that the Canadian banking system isn't necessarily good, rather, it's less bad than other banking systems around the world.

Everything's relative...