According to Wasshington Post, while the United States reels from the global financial crisis, with credit markets still frozen and stock prices careening from highs to lows, Canada has remained relatively insulated.Canadian banks have not gone shaky like their American counterparts, economists and other experts said. There is no subprime mortgage or home foreclosure mess. And while the United States fears a prolonged recession, Canadians have remained relatively sanguine, convinced that they are in a good position to weather the economic tsunami from the south.
Read the following article and answer the following questions:
1. Why did Michael Gregory, chief economist at BMO Nesbitt Burns, an investment firm, say: "We will be pulled down, not as deep, not as long"?
2. How are Canadian banks different from American ones and how did that help them avoid the crisis?
3. How does the World Economic Forum rate Canada's banks compared to those of Sweden and Luxembourg.
It is not surprising for me that Canada isn't affected so much by the crisis. Just tell me, when was the last time when you heard some hot news about Canada? I can’t remember a single news.
ReplyDeleteCanada has not only an internal, but also an external rather conservative politics. And it seams to me that it was a good choice. According to the article, Canada faces some export problems, and not because of the direct impact of the recession, but because of the reducing demand on the US market.
Canada’s banking system is rather different from the American one. They are struggling for objective credits and especially mortgage loans. If one cannot afford to pay the mortgage he doesn’t receive any credit. And I think that it is fair. We should learn to live according to our possibilities. Overrating them will finally lead not only to our bankruptcy, but also of the overall economical system, as it is happening now.
Isn't it strange that neutral countries as Switzerland or Canada (even if it isn't so isolated) are one of the best countries to live in. According to the annual survey "Quality of Life Survey", published by Mercer Human Resource Consulting, Canada is ranked third and Switzerland first. I think that there are no more words to add...
Canada is the least affected country by worldwide financial crisis due to its traditional manner of doing banking..
ReplyDelete1.M. Gregory is optimistic concerning crisis,because Canadian banks are more tightly regulated,more liquid,less highly leveraged and have a more solid base of capital.
2. Differences between Canadian and American bank system:
-canadian banks are national in scope.
-any mortgage that will finance more then 80%of house's price must be insured.
-mortgage interest is not tax-deductable.
-Canada doesn't have a oversupply of constructions..
3.According to the World Economic Forum Canada's banks are the best, ahead of banks of Sweden and Luxemburg.
It is really a great news that there exist such a country( analising developed countries ) wich isn't affected by the crisis at all.As we found in the article the region at issue is Canada.
ReplyDeleteCanadians hold a good and strong position towards the crisis.Their banks are more tightly regulated,more liquid and less higly leveraged.These facts can be noticed in the optimistical statement of Michael Gregory (chief economist at BMO Nesbitt Burns):"We will be pulled down,not as deep,not as long".
The fact that Canada didn't follow its neighbour (USA) is explained by the 2 different aspects of their banking system wich according to the article include the following characteristics for Canadan's banks:
1.national in scope
2.mortgages that finance more then 80% of houses must be insured
3.mortgage interest is not tax-deductible
As we can notice in Canada people don't receive any credit in case they can't afford to pay it,thing that wasn't taken into consideration in the USA.
This month The World Economic Forum rated Canada's banks as the world's soundest, ahead of banks in Sweden and Luxembourg.