Some reasons why Canadian banking is special

美国立法规范放款

The House bill takes several steps aimed at restoring sound lending practices. First off, it requires lenders to take into account the borrower’s ability to repay the debt（看上去很弱智！）. It prohibits prepayment penalties for adjustable-rate mortgages. It wisely builds in better protections for renters, who are often thrown into the streets when buildings are foreclosed — even when the rent has been paid faithfully for years.

And it bans one of the most common forms of kickbacks that brokers often get for steering borrowers into higher priced loans.

Via Scott Sumner, here is a list from Nick Rowe:

...it doesn’t seem to be as simple as “Canadian banks are more tightly-regulated”.在平常，这些行为会被认为抑制金融创新的阻碍物！

1. We never had restrictions on interstate banking, so Canadian banks spread their assets and liabilities across Canada. (So it doesn’t matter if a local housing market goes bust).（so does china)

2. We don’t have Glass-Steagal. The investment banks joined the retail banks some years ago.（so does china)

3. We don’t have mortgage interest deductibility from taxes. So paying down your mortgage is a tax-free investment. So most people want to pay down their mortgages.（so does china)

4. (Except in Alberta), mortgages are fully recourse. You can’t just walk away from a negative equity home and hand the keys to the bank; the bank will come after you for the difference.（so does china)

I wouldn’t describe those differences as “Canada is more regulated”.

But we do have higher capital requirements. And mortgages over 80% must be insured (mostly by the government-owned CMHC).