Krugman: Good and Boring (Canadian Banking System compared to the US' system)

http://www.nytimes.com/2010/02/01/opinion/01krugman.html?em

"Yet as the world’s attention shifts from financial rescue to financial reform, the quiet success stories deserve at least as much attention as the spectacular failures. We need to learn from those countries that evidently did it right. And leading that list is our neighbor to the north. Right now, Canada is a very important role model."

"Canada’s experience also seems to refute the view, forcefully pushed by Paul Volcker, the formidable former Fed chairman, that the roots of our crisis lay in the scale and scope of our financial institutions — in the existence of banks that were “too big to fail.” For in Canada essentially all the banks are too big to fail: just five banking groups dominate the financial scene.

On the other hand, Canada’s experience does seem to support the views of people like Elizabeth Warren, the head of the Congressional panel overseeing the bank bailout, who place much of the blame for the crisis on failure to protect consumers from deceptive lending. Canada has an independent Financial Consumer Agency, and it has sharply restricted subprime-type lending."

Canada has been much stricter about limiting banks’ leverage, the extent to which they can rely on borrowed funds. It has also limited the process of securitization, in which banks package and resell claims on their loans outstanding — a process that was supposed to help banks reduce their risk by spreading it, but has turned out in practice to be a way for banks to make ever-bigger wagers with other people’s money.

So what are the chances that the United States will learn from Canada’s success? Actually, the financial reform bill that the House of Representatives passed in December would significantly Canadianize the U.S. system. It would create an independent Consumer Financial Protection Agency, it would establish limits on leverage, and it would limit securitization by requiring that lenders hold on to some of their loans.

Maybe the world could be more civilized if there was a "Canadian's Burden" to go out and colonize the savages to the south. They pretty much have Vermont in their back pocket, what with all the maple syrup up there, and they should be encourages to plant the Maple Leaf flag in places like Utah and Georgia as well. They have sent their secret agents, the so-called "snow birds" to places like Phoenix and Tampa to lay the groundwork for a takeover, so it is possible. Hockey fans are another source of secret agents, since they already know the words to the (new) national anthem, they could be counted on to high-stick any tea-baggers who objected. I, for one, would love the new national health care system, even if they made us watch curling matches in the doctors' waiting rooms.

except Burlington Northern. We let Warren Buffet
have that one.

http://en.wikipedia.org/wiki/Canadian_National_Railway

:hide:

U.S. Constitution guarantees life, liberty and the pursuit of happiness. Canadia Constitution guarantees peace and good government.

I would choose the Second over the first any day of the week.

Stephen Harper use the words "good government"? I don't think we have heard it so far.

:blush: