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These are stories Report on Business is following  Wednesday, April 10, 2013.

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Study looks at bank sector
A new academic study says the stability of Canada's banking sector lies in history, specifically English oppression of French Canada.

The study by Professor Charles Calomiris of Columbia University, presented yesterday at a financial conference hosted by the Federal Reserve Bank of Atlanta, cites several reasons for Canada's sound banks, which emerged from the recent crisis largely unscathed and are deemed as a model in the wake of the meltdown.

But rather than this being the handiwork of a string of governments, there's "a single, overarching factor" that shaped Canada's political economy, says the university's Henry Kaufman Professor of Financial Institutions in research soon to be part of a book.

"Following the American Revolution, British policy makers were determined to hold onto Canada, but doing so was difficult because the vast majority of the Canadian population in the late 18th century was of French origin," he says.

"Holding Canada in the empire required British policy makers to engage in a series of institutional experiments designed to simultaneously concede increased self-government to their Canadian subjects while limiting the political power of the numerically-large French population," he adds.

"They did not do so simply out of chauvinism; these steps were essential if Canada was to be an economically viable colony. The solution that they eventually hit upon was a federal system that gave the central government control over economic policy making."

Professor Calomaris cites "systematic malapportionment" in Parliament to hold the French down.

"In short, the need to solve a difficult problem of empire - crafting political institutions so that the French population in Quebec could not hold up the economic development of the Canadian interior - gave rise to a political system in which the central government had the exclusive right to charter banks," he says.

"Provincial governments could not create local, territorially-demarcated banks that could serve as the nucleus of an anti-national bank coalition, as happened in the United States."

In the end, he notes, the United States has suffered 12 banking crises since 1840, while Canada has generally sailed along nicely.

How did we accomplish that?

"The short answer is that the Canadian banking system has a very different structure than that of the United States; it has always been composed of very large banks with nationwide branches," writes Professor Calomaris.

"This has not only allowed Canadian banks to diversify their loan portfolios across regions, it has also allowed them to transfer funds in order to shore up banks in regions affected by an adverse economic shock. Nationwide branch banking has also allowed Canada's banks to capture scale economies in administration, while competing among themselves for business in local markets."

Gold outlook dims
Gold is losing some of its shine among the world's forecasters.

Goldman Sachs Group Inc. today slashed its outlook, projecting gold will average $1,545 (U.S.) an ounce this year and $1,350 next.

"Despite resurgence in euro-area risk aversion and disappointing U.S. economic data, gold prices are unchanged over the past month, highlighting how conviction in holding gold is quickly waning," Goldman said in its outlook, according to Reuters.

Last week, Société Générale projected gold will sink by 15 per cent by the end of 2013, averaging $1,500 this year and ending at $1,375.

Fed members see end to QE
The Federal Reserve was forced to release minutes of its last meeting several hours before scheduled today, but the bottom line is that its members largely see an end to its quantitative easing program.

The minutes had been sent by mistake early to some groups, so the U.S. central bank released them publicly before markets opened.

According to the minutes, many members of the policy-setting panel see the asset-buying program known as QE3 slimming down and ending by the end of the year if the jobs market picks up.

This discussion took place March 19 and March 20 and, of course, before Friday's disappointing report on job creation in the United States in March.

Smaller players quit group
Upstart wireless carriers are quitting their industry association over what they say is the dominance of the major plays.

Wind Mobile, Mobilicity and Public Mobile said today they're leaving the Canadian Wireless Telecommunications Association amid "consistent bias" in favour of Rogers Communications Inc., BCE Inc. and Telus Corp., The Globe and Mail's Bertrand Marotte reports.

"From this point, the CWTA does not, and cannot claim to speak on behalf of the Canadian mobile wireless sector," they said.

China imports surge
There are questions today surrounding the credibility of China's latest trade statistics, but a 14-per-cent surge in imports in March is buoying investors nonetheless.

Export growth slowed to 10 per cent, leading some observers to question the accuracy of Beijing's numbers.

"The slowdown reflects the fact that rapid export growth earlier this year was never likely to last," said economist Qinwei Wang of Capital Economics in London.

"It also reinforces concerns about the accuracy of the official data. Note that official customs data on exports were much stronger than the corresponding figures from China's trade partners in the first two months of this year."

Still, investors applauded the stronger imports as a sign of China helping to bolster a global recovery. There are questions, though, as to how long this can last.

"With the lingering concerns about property markets depressing commodity demand and few signs that household spending is picking up, this momentum is unlikely to be sustained," Capital Economics said.

Bitcoin vs. Brit coin
There's some fun to be had today in comparing a digital currency to a real one, if only to show how weird some things can get.

The digital currency is, of course, the phenomenon known as Bitcoin. The real one – yes, I admit it's for the sake of the headline, though the issue is real – is the British pound.

Yesterday, Bitcoin marked a milestone, topping $200 (U.S.). This morning, it hit $266.

As The Globe and Mail's Brian Milner reports, the four-year-old Bitcoin has hit mania levels, having been valued at less than 10 cents just a few years ago. This year alone, it's up from $13, fed by a flare-up in the euro crisis related to the troubles in Cyprus.

Speculators appear to be surging in, looking for profit, even though this is a thing that lives in cyberspace and is, among some, seen as a bubble that can only end badly. Think dot-come bust.

It's not like you can actually do much with Bitcoins, and observers believe they're not about to become real, in a currency sense.

You can buy them and trade them, and, reportedly, a New York bar will take them and one man claims to have sold an old Porsche for 300.

(One commenter on The Globe and Mail site cited a profit by selling at $185.)

Let's compare that to the real currency, the pound.

It has rallied of late, about 3 per cent since mid-March to the area of $1.53, on some better-than-expected economic news. But this could be short-lived as other news is reported, notably the minutes of the latest Bank of England meeting, which will be released next week.

The outlook for the pound suggests it's going to lag. Bank of Nova Scotia, for example, forecasts it will dip by the end of this year to be valued at $1.45 and remain in that range through 2014.

Where's Bitcoin headed? Who knows?

"I can't make a call on Bitcoins beyond its interest for financial stability," said Sébastien Galy of Société Générale. "It has elements of a security in it and is not clearly a currency."

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