In the late 1980’s, Canadian regulators effectuated the elimination of the provision in the Canadian financial services regulatory code facilitating the separation of commercial and investment banks. The US equivalent to this was the Glass-Steagall Act of 1933 which was repealed in 1999. This particular provision intended to render void commercial banks of the ability to take imprudent risks with depositor funds. However, any factual basis delineating the facilitation of the repeal of the Glass-Steagall act of the Great Recession is largely predicated on fallacious premises as a function of the fact that the majority of the investment banks which experienced the most acute degree of hardship as a result of the fallout of the crisis were not bank holding companies (companies which control several banks), and the Canadian financial system certainly lacked such regulations long before the repeal of the Glass-Steagall Act of 1933 to begin with. Furthermore, few US banks actually sought to extract the rewards of this greater degree of financial freedom due to greater reporting on their part to financial authorities. The repeal of such regulation ameliorated the Canadian banking system as the “Big Five” (RBC, Scotiabank, CIBC, TD, and BMO) acquired the majority of Canadian investment firms, which ameliorated the stability of the Canadian financial system as a whole due to these funds being not only subject to deeper pockets of capital of their parent companies, but also to regulation defined by a greater magnitude of effectiveness as a function of the OSFI’s more prudent supervision of financial institutions on the basis that it would regulate the entire entity which rendered its regulatory framework more prudent and it would, unlike US regulators, forgo the regulation of each individual bank subsidiary predicated on its classification.
1986-Today 