Given the economic environment we're in and the fact we're about to spend our way into health, the Canadian Community Reinvestment Coalition (CCRC) is an organization you may want to support. To me, Canada's banking sector is efficient but it stinks of an old boys network.
It's an informative site. Here's a teaser:
Myth #3 : Canada's Big Banks serve customers fairly and well
Fact: Our Big Banks treat many customers poorly
Surveys in 1996 and 1997 by the National Quality Institute of over 8,000 Canadians regarding satisfaction with 21 industries found banks ranked in the bottom 5 both years. In addition. at least 400,000 adult Canadians do not have a bank account, mainly because banks often make it hardto open an account by requiring customers to provide many pieces of ID, to have a job or to keep a minimum amount of money in the bank. Also, the banks' own statistics show that lending to job-creating small and medium-sized businesses decreased between 1995 and 1997. Of the $100 billion increase in bank business lending over this 2-year period, over $80 billion was loaned to big businesses in loans of $5 million or more. Banks loaned more to big businesses despite losing almost $200 million more during this period from big business loan defaults ($543 million lost) than from small business defaults ($371 million lost).
Myth #2 : Our Big Banks are threatened by foreign competition
Fact: Global competition is not a threat, despite bank claims
There are now fewer (43) foreign banks in Canada than in 1987 (when there were 59) and their combined assets amount to only $92 billion (7% of total banking assets in Canada), not much compared to the $1.1 trillion in assets of Canada's Big Five Banks (86% of total assets). Foreign banks have faced significant barriers to entering Canada for over 30 years, and continue to face barriers even after changes were made under a 1997 World Trade Organization agreement. The costs of setting up branches, advertising, training staff, and attracting customers mean that, as former federal Finance Minister and Prime Minister Paul Martin has stated, foreign banks will never offer serious competition to our Big Banks or offer service in the vast majority of communities across Canada.
Lefty, I've read that Canada has been much better off than the USA on the credit issue, due to their regulations on their financial industry. (Until the lack of commerce to the south eats it way north like a worm.) Is this true?
ReplyDeleteGetting credit here is tougher than in the States. It doesn't necessarily mean we don't live beyond our means. It's harder to get a handle on this. Our savings rate is not that much better than the U.S. - if at all.
ReplyDeleteWe arguably have the safest and most efficient banking system in the world due to regulations.
But what God giveth he taketh; it's also somewhat unresponsive to customers because they have a monopoly. As the site I linked shows, it's basically an old boys network.
I scratch my head when the left side of the political spectrum call for more regulation. It's already very tightly regulated. But, like I said, it's not accountable.
And yes, the Canadian economy is essentially tied to the American economy. We speak of independence but 85% of trade is with the U.S.