5) Why was Canada able to avoid most of the repercussions of the 2008 Financial Crisis? Your answer should delve into the historical development of both systems.
The 2008 Financial Crisis left the world in a deep recession and it took a long while for the economy to recover. The repercussion was unforeseen and has shocked the whole world. Fortunately, Canada was not as heavily impacted by the crisis compared to the United States.
The main reason that Canada could avoid most of the repercussions was probably that while America was structuring a system to achieve maximum access and innovation, Canada was willing to sacrifice some of both in turn for more stability. Throughout history, the United States had always feared centralized monetary
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After the LDC (Less Developed country) crisis, Canadian banks suffered greatly and the nation faced the worse decline since the Great Depression. A Commission of Enquiry was created to investigate bank failures and regulation changes were recommended. This was when OSFI (Office of the Superintendent of Financial Institutions) was created because Canada realized that they should move past self-regulation. In addition, FISC (Financial Institutions Supervisory Committee) was also established to have greater oversight of the system. U.S. on the other side felt that they had a good recovery from the LDC crisis through restructuring of balance sheets and debts. Although they have agreed to international regulatory standards (Basel accords) with more sophisticated risk measurements, leading up to the 2008 financial crisis the U.S. was still financing mortgage and other debt with securitized instruments, which was a threat that regulators should have considered but he profit and incentives high enough to make market participants look the other way when it comes to proper lending practices and risk evaluation. Canadian banks and regulators were more conservative and limited the amount of positions they took in derivative markets. While Americans leaned toward short-term profits with little adjustment for risk, the Canadian struck a better balance …show more content…
After World War II, many nations were left with weak economy and financial instability. Offshore banking became a method to escape national regulation as many national regulators turned a blind eye on deposits in currencies other than their own. The offshore market became popular due to its ability to facilitate new finance innovations and keeping transaction costs low. Eurodollar market for example is a product of this trend. As offshore banking became competitive, the U.S. had to remove limits on national banking and the division between commercial and investment banking. Canada also benefitted from this new trend as it appeared to be very promising for international expansion. However, differing from the United States, Canadian Banking Act was in place to protect domestic banks from new foreign entrants and also effectively manage risk. With the increase of international investment, not only does funding needs were satisfied but new business information systems were also developed due to the increased need for more centralization and a variety of services. New regulations such as The International Banking Act of 1978 was formed to level the playing field between foreign and American banks by requiring mutuality from any country whose banks are seeking permission to enter the United States. The Gramm-Leach-Bliley Act also removed barrier for commercial banks, investment banks,
The result of the Second World War fundamentally changed Canada and its economy started booming. There are many reasons for this change and if you remember, World War I also made a big impact on the development of Canada. However, in the next few paragraphs I will talk about how Canada gained much more respect and autonomy from the Second World War than ever before and also the change from a country into an industrialized nation.
... the American economy for trade rather than their own country. The shift to a national highway in Canada supported trade and the economy in giving motorists the ability to travel through Canada without having to leave like which had to be done in previous years.
The Great Depression was a terrible point in Canadian history, and for most of the world. It was a point in time where thousands of people lost their jobs, and even lost their homes because of the depressed economy. Business was booming in the early 1920s, but when companies tried to expand, and therefore issued stocks, the economy was thrown off. Some investors sold their stocks for high prices, and as a result, everyone else followed. With less of a demand, stock prices became fractions of what they used to be, and on October 29, 1929, the New York Stock Exchange collapsed, followed by the Toronto and Montreal Stock exchanges. This collapse of the stock markets caused a depression like which the world had never seen before. It was important for governments to find methods to deal with the depression, but the Canadian government wasn't very successful in its attempts to deal with the Great Depression.
The post-war time was a period where major changes were occurring. After being involved in two international conflicts, Canada was ready to reestablish their economy. During this time, Canada had started working on ways to become stronger and reputable. It is evident that Canada had matured through the post-war era. Canada’s economic progress left a positive impact on the growth of the country as consumerism became popular, and economic ties with America became stronger. Moreover, the removal of racial and ethical barriers contributed to Canadian social affairs such as the huge wave of immigration and the baby boom. The Canadian government also had become more aware and involved in issues impacting Canadian citizens. Canada as a whole started identifying itself as an independent nation and participating in events that brought a positive reputation amongst them. These economical, social, and legal changes helped Canada mature into the country it is today.
Many Canadians thought the depression was brought about by the wheat crop crash and not the stock market crash because many Canadians and farmers were dependent on the growth of wheat because it made up a majority of their exports, but seeing as the wheat provinces were hit with a severe drought the wheat crops crashed leaving many farmers out of jobs and money, causing a great affect on Canada. The causes of the great depression were due to over-production and over-expansion because Canadian companies expanded their industries of goods so that they could generate more profits. Yet economic activity shrank in the late 20’s and companies were left with a heavier debt and lack of...
It is relevant this case because Glass-Steagall did not prevent commercial banks from engaging in securities activities overseas. By the mid 1980s, US commercial banks such as Chase Manhattan, Citicorp and JP Morgan had thriving overseas securities operations. Currencies were not securities under the Glass-Steagall Act, but since exchange rates were allowed to float in the early 1970s, they have entailed similar market risk. In 1933, futures markets were small and transacted primarily in agricultural products, so they were not included in the legal definition of securities. By the mid-1980s, US commercial banks were subject to primary capital requirements set by the SEC, OCC and FDIC while US securities firms were subject to the SEC's Uniform Net Capital Rule (UNCR).
By the end, there was an agreement over adopting a federal government along with delegating responsibilities and powers to provincial authorities’ .But, as a federal system, Canada by contrast to United States had difficulties in distributing the power between the national, provincial governments and territorial governments, because only the first two entities enjoy the major power, and the other smaller entities have only those powers which are directed to them by the provincial government, the thing that made it increasingly decentralized to the point that it became the world’s most decentralized federal system in the world, so decentralization arise when there is a extensive sharing of authority, power, financial issues ,foreign affairs…etc between the different entities of the nation
The Great Depression was a period, which seemed to go out of control. The crashing of the stock markets left most Canadians unemployed and in debt, prairie farmers suffered immensely with the inability to produce valuable crops, and the Canadian Government and World War II became influential factors in the ending of the Great Depression.
In the year of 1867 the nation we know as Canada came into being. The Confederation in this year only came about after things had been overcome. Many political and economic pressures were exerted on the colonies and a federal union of the colonies seemed to be the most practical method of dealing with these pressures and conflicts. While Confederation was a solution to many of the problems, it was not a popular one for all the colonies involved. In the Maritime colonies views differed widely on the topic. Some were doubtful, some were pleased, others were annoyed and many were hopeful for a prosperous future.1
From the first Great War, to the Great Depression, and after the Second World War, you could say that Canada had been transformed significantly. Since the day the British North American Act was enacted in 1867, Canada was a small and developing country. The Second World War had been one of its biggest challenges yet and the countries future prospects tremendous benefits especially in the fields of political development, social development, and economical development. It was a great struggle to get where she is today and WW2 was a major contributing factor to why Canada is such a strong and unified nation
Currently, Canada remains the world’s second largest country, full of vast and rich resources from all corners of the nation. None of the accomplishments and achievements that Canada has made to date would have been possible without Confederation. Without intense pressure from the Americans, and without the common goal that a few men shared of unifying a country, Canada would not be the strong, free, independent and united nation that it is today.
The financial crisis occurred in 2008, where the world economy experienced the most dangerous crisis ever since the Great Depression of the 1930s. It started in 2007 when the home prices in the U.S. Dropped significantly, spreading very quickly, initially to the financial sector of the U.S. and subsequently to the financial markets in other countries.
This essay will examine the causes of the 2008 Global Financial Crisis (GFC) from a Marxist perspective. This paper will specifically examine and critique how Marx’s Theory of Crisis can be applied to understand and interpret the underlying structural causes of the 2008 Global Financial Crisis.
In conclusion Canada gained independence because of a series of events that took place during the twentieth century. If it hadn’t been for these events, Canada to this day might have been a part of the British Empire. Through discussion on the Chanak affair we signalled that we wanted autonomy. Through our hard work and lives, the world knew we had the ability to stand alone as a strong nation. While, our international reputation of being a “peacekeeping” country the right to stand as an independent self-governing nation. But finally through the Canada Act, we stood solely independent from our Empire. It is obvious that the twentieth century provided us with great chances to become an independent strong nation.
Mckinney, Joseph. "US-Canadian Economic Relations, Twenty Years after the USA-Canada Free Trade Agreement." British Journal of Canadian Studies 23 (2010): 233-246.