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Reuters reported on Thursday that Canada's banking system is considered to be the world's soundest, based on the latest Global Competitiveness report from the World Economic Forum.
Countries around the world were ranked on a scale of 1 (banks are essentially insolvent and need government bailouts) to 7 (everything is A-okay). Canada placed first, with a score of 6.8, followed closely by Sweden, Luxembourg, Australia and Denmark.
By comparison, the U.K. ranked 44th, United States ranked 40th and Germany ranked 39th.
However, before you rush into Canadian bank stocks, keep in mind that the scores were based on the opinions of executives – and let's face it, they have been known to overstate the health of their banks in recent months. Indeed, although the United States was low in the rankings, it still generated a score of 6. That is, U.S. banks might rank low on a relative scale, but executives, nonetheless, think things are dandy in the sector.
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Alex D from Ottawa, Canada writes: From Wikipedia's Great Depression in Canada page:
"Canada did have some advantages over other countries, especially its extremely stable bank system that had no failures during the entire depression, compared to over 9,000 small banks that collapsed in the United States."
For what it's worth.- Posted 09/10/08 at 11:30 AM EST | Alert an Editor | Link to Comment
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Bob Robert from Manitoba, Canada writes: You neglected to comment on how their "opinion" might be influenced. I'm not sure I would want to standup on the world stage and be known for bashing US banks! or any major power! The fact that the range is so tight is an indication of muted responses.
- Posted 09/10/08 at 12:29 PM EST | Alert an Editor | Link to Comment
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Michael Hogan from Halifax, Canada writes: This seems like pretty good news. I wonder why it isn't getting more play on the Globe & Mail web site and on the election coverage on the web site?????. It seems to have almost disappeared since I read it early this morning. I think it should give some comfort to some Canadians that the sky is not falling in Canada to the extent that it is elsewhere.
- Posted 09/10/08 at 12:32 PM EST | Alert an Editor | Link to Comment
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Alex D from Ottawa, Canada writes: In the Great Depression, Canada suffered more than the US in terms of lost GDP and unemployment ... but hey, the banks survived.
But seriously, look at the calamity that is Iceland - groveling for cash from Russia. Or the UK, US, Germany, etc. needing to put tax payer's cash at risk to shore up the Banks. What a bloody mess.- Posted 09/10/08 at 1:08 PM EST | Alert an Editor | Link to Comment
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Kevin Lafayette from Saskatoon, Canada writes: Yep, Harper has been right all along. We are in good shape, provided we do not shoot ourselves in the foot with a carbon tax or anything like that.
- Posted 09/10/08 at 3:43 PM EST | Alert an Editor | Link to Comment
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David Butters from Toronto, Canada writes: With respect to Alex D's comment, what would you expect given our trading realtionship with the US at the time? Wikipedia also points out that while our drop in GDP and our unemployment were somewhat worse than the US (and the depression more prolonged here) this was due to obvious vulnerabilities in our economy at the time such as a greater reliance on fewer natural resource products compared to today, a similar approach to credit (too much stock on credit for example), overwrought tariff reactions, as well as other structural issues.
- Posted 09/10/08 at 5:32 PM EST | Alert an Editor | Link to Comment
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Prsn Nep from Canada writes: Kevin, what does carbon tax have to do with the banking sector?
I for one am really hoping for the carbon tax. Everyone who consumes less than the average energy will benefit. (In fact since median is almost always less than the average, more Canadians will benefit rather than lose.)
Remember, Sweden's carbon tax is 15 TIMES bigger than the one proposed by Liberals. Their economy is growing FASTER than ours for many years now. Our economic growth has been sad considering we saw one of the biggest commodity boom in history.
And keep in mind most countries' banks' rankings were in the 6.X range. US ranking in the 40s had a score of 6.0. We had 6.8. Not much of a difference.
Fine print: if you're a city-dweller, you'll benefit if you produce less than average GHG among city-dwellers. If you're a farmer, you'll benefit if you produce less than average among farmers. If you're a northern resident...
I have debated about the carbon tax with many people and they have all been convinced it's a good strategy. :) And a bunch of top ECONOMISTS came to the same conclusion. It seems only people who don't like the carbon tax are Harper or people who REFUSE to understand it.- Posted 09/10/08 at 5:40 PM EST | Alert an Editor | Link to Comment
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R G from Canada writes: So many of these points don't add up. The banks are claiming hard times rollingover long term debt but are still offering 40 year mortgages with 0% down. The feds are trying to stimulate credit but the banks are holding on to half a point instead of passing it on to consumer which might stimulate the consumers. As far as 6.8 not being far from 6.0 the scale was out of 7 so this is like a gold medal compared to 30th off the podium. This 25 billion is taxpayers money being transferred to private instittuition in exchange for bricks of low to no income investments. So ultimately we are bolstering a private industry that posted record profits off the backs of it rank and file workes and customers last year. The golden parachutes are growing bigger and the working poor population is grower larger because of it. We wonder why radical thinking is on the rise and yet we continue to support the elite at the expense of the masses. Wake up Stephen Harper and pay attention to the people who must seem so far beneath you and your cronies.
- Posted 10/10/08 at 1:42 PM EST | Alert an Editor | Link to Comment
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