The stability of the banking industry of Canada

The stability of the banking industry of Canada demonstrated during the international financial crisis in the early 1980s and during the collapse of the real estate market in Canada in the early 1990s that the Canadian system has experienced no problems. In 1996, Canada's banking laws have been some changes aimed at further strengthening the safety and soundness of financial institutions. These changes include, inter alia, the establishment of a mechanism to monitor systemic risk in the major clearing and settlement systems, as well as interference in the affairs of troubled banks in the early stages of a problem. At the same time under the systemic risk refers to a "domino effect" in which the failure of one financial institution or payment system can lead to failure of other institutions and systems as a result of relationship that exists between them. The Canadian Government is taking active measures to protect the interests of clients in the financial sector. These activities create financial consumer agency, which must deal with informing consumers about their rights in the financial services sector and enforce federal laws on consumer protection. In addition, an independent body - Service Commissioner of Financial Affairs (CFSO) to consider complaints from individuals and small businesses about illegal actions of financial institutions. According to the government, Canadian banks have become part of CFSO, other financial institutions may also take part in its work on a voluntary basis. In 1996, the Canadian government's decision to set up a special body - the Working Group on the development of the financial services sector in Canada. In the framework of the Working Group proposed restructuring of the banking and financial sector is planned to replace the existing classification of banks (categories I and II) on a three-stage system based on the amount of equity capital. The new structure of the banking sector should collect the following: - Large banks with equity of over $ 5 billion, shareholders who may be - Medium banks with a share capital from 1 to 5 billion dollars and a limited number of shareholders (in the hands of one shareholder may be 35% or more of the voting shares) - Small banks with equity less than $ 1 billion (There are no restrictions on ownership of the shares of small banks are not available). In order to stimulate the process of creating new lending facilities. The Working Group proposed changes to the registration system for financial enterprises, and in order to provide a banking license. It is also expected to set the new financial companies 10-year tax "holiday", to qualify for exemption from the federal capital tax over a specified period of time. I would like to cite the following fact, proof of a high international reputation of the banking system in Canada: An American Banking Technology Secretariat, which includes includes 125 largest U.S. banks, the banking system Canada uses as a model for the development of the modernization project of the American banking infrastructure. Category: Banking systems | Tags: the levels of the banking system