Things we can learn from Canada…

The least-bad rich-world economy
The lesson? “…neither its financial system nor its housing market magnified the recession.”

Canada, for example, did not push banks to lend money to people who had iffy chances of paying it back. Far from it. In Canada, if your mortgage is over 80% of the house value you must buy insurance against default.

Now, they are trying to help out the rest of the world whether we like it or not. Personally, I say – Thank You, Canada!

Canada wins key fight against bank tax

Canada has won a key fight in its high-profile international campaign against a global bank tax as G20 finance ministers Saturday approved a plan that allows countries to manage the issue as they see fit.

Proponents of such a tax ­ including the United States and Europe ­ are free to go it alone, but the new plan allows the rest of the G20 to avoid the controversial idea and find other ways to reduce banking risks.

Guess what path Obama’s going to choose.

Later in that story this bit of unintentional humor appeared:

In their final communiqué, G20 finance ministers and central bankers said the financial sector must make a “fair and substantial” contribution to paying for any of the burdens associated with government intervention.

This made me laugh, since the burden of government intervention has been 80% of our problem in the first place. For example, the G20 is concerned about bank capital.

On the complex issue of banking reforms – including a common definition for high-quality capital and the percentage of capital banks should have on hand – the G20 has agreed that a plan will be announced in November when leaders meet in Seoul.

Great idea, we can get Barney Frank to define “high quality capital.” He did that for the US, let’s have him do it for the world.

Then it’s noted that:

Banks generally resist higher capital requirements because it cuts into profits.

In truth, US Banks had higher lending standards before the government started forcing them to give mortgages to people who couldn’t pay them back. That’s the sort of intervention we should worry about.