At the G8 summits the Canada can look good

At the G8 summits, the Canada can look good. Foreign observers move in Toronto and Ottawa to scrutinize its banking system, in contact with the United States and yet one of the safest in the world according to international experts. No large facility had to be recapitalised by the State, no "bad bank" was established. This good image allowed the banks to raise 14 billion dollars to private since the fall of investors.

"Ten years ago, none of our banks included in the World Top 50. Today, they are all. "And yet, before the crisis, we were criticized for being shy of our banking system," Welcomes Jim Flaherty, Federal Minister of finance. The number one Canadian, Royal Bank of (RBC) is located in the world in terms of assets, but 30eplace to the 12een terms of market capitalization.

When credit institutions have felt the crisis of international liquidity, lower central bank rates and a liquidity facility reduced pressure. Canada Mortgage and Housing Corporation, the public company to help accession to housing guaranteed by the State, bought banks to mortgage of good quality for $ 55 billion, or less than the planned $ 125 billion.

The players of the place are main ingredients of this "model". Place, the prudent criteria for granting of credit, a prudential rules more demanding than average (solvency and "leverage"), the importance attached to the risk of reputation in the small world of "bay street" - the financial centre of Toronto-, and resistance to the concentration.

""Sub-prime mortgage"loans to households little or solvent step remained marginal, 2-5 of the loans, and they were not a systemic risk", said André Asselin, Director General of Canada Mortgage and Housing Corporation. Unlike the United States, interest is not deductible, the riskiest loans insurance is mandatory and 'credit default swaps' market does not exist. Banks retain most of their credits in the balance sheet. In March, 0.38 of mortgage loans were overdue. Nearly eight times less than in the United States.

Development control

The political turning point dates back at the end of the 1990s, when the Government and the Central Bank had blocked two major bank mergers. Before the crisis, this conservatism was garlic - their brake in the eyes of many observers. Today, a Canadian or foreign shareholder can hold more than 10 of large banks. These can hold insurers, but they cannot freely selling insurance at their Windows. Banking assets represent 180 of GDP, 330 in France or 820 in Switzerland. Five large groups hold 86.

Medium-sized international, Canadian banks rely on a strong national retail activity. They were also allowed in the 1980s to develop in the Investment Bank and then to invest outside the country, especially in America: in 2007, a large third of their banking profit came from abroad. They continue to look abroad, cautiously.

Number two, Toronto Dominion, wants to develop America of the North, "by internal growth or acquisition", according to its head of strategy, Bernard Dorval. RBC looks at the United States "in very prudent manner" and sees axes of development in the world, for example for its joint-venture with Dexia in the conservation of titles.Paying during the crisis, Canadian conservatism open opportunities "This is the big question," recognizes Gordon Nixon, RBC pattern.