Canada and the Global Financial Crisis

• Author: Anita Indira Anand
• Pages: 72-78

72

 8

Canada and the Global Financial Crisis

A main objective of this book is to illuminate some of the issues that

persistently cause concern in the Canadian capital markets, and the

ways in which these problems aect Canadian retail investors. But it

is also important to acknowledge that, looking at Canada’s nancial

system, the picture is not all bad. Notwithstanding the diculties

that confront individual investors in our marketplace, the Canadian

nancial system has proven itself to be exceptionally robust on a

macroeconomic level.

Canada’s nancial system was put to the test during the global

nancial crisis. Just as one might ask, “Where were you when Neil

Armstrong walked on the moon?” or “Where were you on 9/11?” one

might just as well ask, “Where were you when Lehman Brothers

fell?” It was an event that transcended national borders. The col-

lapse of this major US investment bank, which followed the sales

of Bear Stearns and Merrill Lynch, was one of a series of disasters

that shocked economies around the world. Governments through-

out Europe and the UK had to step in and rescue their banking sys-

tems from total collapse through nationalization, recapitalization,

and multi-billion-dollar bailouts.

1 See Bastian Breitenfellner & Niklas Wagner, “Government Intervention in Response

to the Subprime Financial Crisis: The Good into the Pot, the Bad into the Crop”

(2010) 19 International Review of Financial Analysis 289 at 297; Silvio Contessi &

Honda El-Ghazaly, “Banking Crises Around the World: Dierent Governments,

Dierent Responses” (April 2011) The Regional Economist 11.