Surmounting the financial crisis: contrasts between Canadian and American BanksFirst - Thomas O. Enders Memorial Lecture

The Canadian and US economies are more integrated across more sectors than any others. In Canada before the crisis, five large federally chartered banks had national franchises, while a sixth was a major regional presence. Canada, like the US, continues to have an important insurance sector and active credit unions. The structural differences in the two banking systems had their roots in differing economic histories. In the latter half of the nineteenth century, heavy immigration to the US fostered the establishment of thousands of small banks that financed development in new communities. Although the immediate trigger was the excesses of the US mortgage market, the roots of the crisis lay in the opaqueness and complexity resulting from financial de-regulation in the US over the two preceding decades. Given the differences in banking system structure and regulation between Canada and the United States, the dynamics of the financial crisis played out differently in the two countries.