Canada’s “Boring” Banks Have Last Laugh

Because I’ve attended a fair number of presentations over the years by Canadian economic development representatives and other boosters of the great northland, I’ve got many of the salient talking points down pat.  Canada’s got a good thing going in terms of a vibrant economy, well-educated people and a top quality of life.  But you know the message must be getting out when such things are espoused in the unlikeliest of places.  Such is the case in the September issue of Esquire magazine, which has long been regarded as the more literary of the mainstream men’s magazine, its typical fare running towards good fiction, an occasional profile of a public figure, recreation and fashion, but not much regarding business.  Yet, an article by Ken Kurson in this latest issue makes the case that Canada’s steady-as-you-go “boring” banks have managed to outperform most financial institutions in other countries during the industry meltdown of the past couple of years.  The following quote provides the gist:

“When the worldwide system collapsed, boring Canada didn’t have a single bank poisoned by toxic assets and not a penny of public money was used to bail out its financial institutions.

“More than simply avoiding crisis, the fact that the banks didn’t collapse allowed them to do what they’re supposed to do (and what ours are still largely failing to do) — lend money. See, in America, more than half the mortgages originated were intended for sale. In Canada, nearly all mortgages are held by the banks that issued them. That means it was harder for a piker to get a loan in Canada five years ago — and easier for the guy with good credit to do so today. The result? Canada’s economy is expected to grow by more than 3 percent this year and next. The combination of a robust commodities supply and the tech and banking strengths that are enhanced by stable business practices is formidable.”

Read more: http://www.esquire.com/features/portfolio/canada-economic-development-0910?click=main_sr

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