Author: James K. Jackson, Specialist in International Trade and Finance
The international financial crisis of 2008-2009 spurred policymakers in the United States and elsewhere to consider changing the way they supervised financial institutions and financial markets to reduce the prospects of experiencing another global financial crisis. Canada’s financial system, in particular, garnered attention, because it has seemed to be more resistant to the failures and bailouts that have marked banks in the United States and Europe. In particular, some observers assessed the merits of the way Canada supervises and regulates its banks as one possible model for the United States. There likely are aspects of Canada’s financial supervisory framework that may offer an approach to supervising financial markets that may be useful for the United States to consider. However, the smaller scope of Canada’s financial system and its economy likely lessen the transferability of systems or procedures used in Canada to the vastly more complex U.S. financial system. This report presents an overview of Canada’s financial system and its supervisory framework and draws some distinctions between that system and the current U.S. framework.