In a recent article columnist Paul Klugman advocated that the USA follow the Canadian model and regulate its banking industry, noting that Canadian banks survived the 2008 financial meltdown almost without a hitch while large banks in the US and elsewhere had to be bailed out with billions of dollars of taxpayers' cash.
Op-Ed Columnist - Good and Boring - NYTimes.com
USA could do worse than restructure their bank on the model of Canadian banks. Ireland and Iceland are thinking of doing the same (or at least they were). The recent meltdown affected Canadian banks not in the least. They all kept making healthy profits during the meltdown, if somewhat down from before. None of them cut the dividend.
American bank stocks went though the floor, and in the process dragged down Canadian bank stocks as well. Canadian bank stocks were down for no reason other than American bank stocks were down.
I bought Canadian banks last year, and I am sitting pretty now. BMO is giving me 10% dividend, CIBC 9%. Now dividends are down sharply of course, since bank stocks have recovered rather nicely.
But Canadian banks is a winning model, at least it has been for the past several decades. USA would do well to restructure their banks along Canadian lines. But they probably won’t do it, Americans just hate to admit that somebody else may have a better idea, better plan than they do (look at the health care debacle over there).
Incidentally, a few months ago IMF looked at the banks of the world and ranked them. Canadian banks were No. 1, the best in the world. Swedish banks were No. 2. By contrast, US banks were No. 40 in the world, British banks, No. 44.