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They were a cool bunch, so brazen in their disregard for the rules that they had the nerve (or the stupidity) to call themselves "the cartel." They used an invitation-only chat room to rig trades in the foreign-exchange market to enrich themselves and their employers – and to "rip off" their clients, in the words of New York's Superintendent of Financial Services, Benjamin Lawsky.

Wednesday's settlement reached by four Wall Street banks, the U.S. Justice Department and several American regulatory agencies will see the institutions plead guilty to criminal charges and pay fines totalling more than $5-billion (U.S.). That brings to about $10-billion what these banks and UBS AG will have recently paid to settle charges with U.S. and British authorities involving manipulation of the foreign-exchange market or a key interbank interest rate.

There is little evidence that Wall Street has changed its ways, seven years after the financial crisis that threatened its very existence. Its leading champions still seem content to chalk up repeated instances of rogue behaviour to a few bad apples rather than an industry culture in which greed and arrogance are considered the prerequisites of success.

This is the same culture that crashed the world economy in the first place. It is a culture that forgets (if it ever knew) that the role of the financial sector is to serve the real economy, not the other way around. Banks and financial institutions exist to intermediate between savers and borrowers, channelling savings to their most productive uses. When the financial sector exists mainly to serve itself, it becomes a drag on economic growth and productivity.

This is where we are now.

If the crisis had an upside, many believed, it was that it would lead banks to shrink and focus on their core financial intermediation activities, instead of concocting increasingly complex, but marginally useful, financial products that only increased leverage and risk in the system. But the recent evidence suggests that Wall Street is again as big and brash as it was before the crash.

It's not just a U.S. phenomenon. There's evidence that Canada's financial sector may also have become too big for this country's good. Inflated levels of consumer debt may be as much a consequence of a bloated banking sector as an overvalued housing market.

Is this evidence of the "too much finance" thesis advanced in a new International Monetary Fund study? Canada has a highly developed financial sector, as measured by its size and liquidity and the ability of individuals and businesses to gain access to its services. Historically, this has been a plus, helping a young country to develop.

But the IMF study argues that there are rapidly diminishing returns to society as the financial sector grows beyond its optimal size. "High levels of financial development … lead to a loss of efficiency in investment, suggesting that the quality of finance – for instance, the allocation of financial resources toward productive activities and that of human capital across sectors – is impaired," it notes.

The IMF study constructs a "financial development index" based on data from 128 countries collected over three decades to 2013. The study cites Ireland, the United States and Japan as countries with overdeveloped financial sectors. Smaller financial industries would represent a plus for their economic growth and productivity. The study did not provide data for Canada, but lead author Ratna Sahay said in an e-mail that "Canada is close to the U.S. on the aggregated [financial development] index."

Canada's banks may not have reached Wall Street levels of greed – although Wednesday's settlement with Barclays PLC did cite a message from a Royal Bank of Canada trader involved in one questionable 2009 forex transaction – but we, too, may have allowed our financial sector to get too big.

When such growth is the corollary of unsustainably high consumer debt levels, watch out. Not just because of economic shocks. Unlike borrowing to buy a more powerful computer for your business, borrowing to buy a more expensive house will not make Canada's economy more productive. Yet the banks keep lining up to provide mortgages and related products, such as home equity lines of credit, instead of making more productivity-enhancing loans.

"The consumer side is found to be less beneficial [for economic growth and productivity] than business investment, as you saw with regard to the housing market in the U.S. during the global financial crisis," Ms. Sahay noted in her e-mail.

We may be more like Wall Street than we think.

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