Canada's banks offer haven in turbulent sea
Vancouver Sun
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Canadian financial institutions did not escape unscathed -- at last count, writedowns totalled $11 billion -- but the banking system remains sound.
Unlike the U.S. investment banks, Canadian banks are well capitalized, regulated and managed. Throughout the turbulence, the banks' core earnings remained intact and they continued to be able to raise sufficient financing to support their lending activities.
The so-called shadow banking system that collapsed so spectacularly south of the border, hasn't existed in Canada since the late 1980s when regulation changes allowed banks to buy securities dealers. That put commercial banks and investment banks under the umbrella of one financial group. It meant investment dealers were backstopped by a vast depositor base, whereas U.S. firms were leveraged to the hilt on funds borrowed from capital markets.
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