Should the Canadian banking system be the model for a restructured financial system in the United States? Yes, argues Canadian journalist Theresa Tedesco in “The Great Solvent North,” her recent Op-Ed piece in the New York Times.

“Has the world turned upside down?” she asks:

America, the capital of capitalism, is pondering nationalizing a handful of banks. Meanwhile, Canada, whose banking system had long been notorious for its stodgy practices and government coddling, is now being celebrated for those very qualities.

Tedesco writes, “The Canadian banking system, which proved resilient in the global economic crisis, is finally getting its day in the sun. A recent World Economic Forum report ranked it the soundest in the world, mostly as the result of its conservative practices. (The United States ranked 40th).

In Canada, where “the five major chartered banks, the few regional banks and handful of large insurance companies are all regulated by the federal government,” Tedesco argues that, “the big five Canadian banks — Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Canadian Imperial Bank of Commerce and Bank of Montreal — survived the recent turmoil relatively unscathed. Their balance sheets remain intact and their capital ratios are comfortably above requirements.”

Perhaps, she concludes, “Since Mr. Obama seems to admire the Canadian banking system, his administration might want to take a page out of its playbook.”

Photo ©Carolyn B. Heller