The Canadian Banking Industry has received high praise and developed a reputation for its stability. The World Economic Forum, in its annual global competitiveness reports, has identified Canadian banks as the soundest in the world for the past seven years in a row.
In addition, in its Financial Development Report, the World Economic Forum ranked Canada’s banking system sixth among 62 countries in terms of its breadth, depth and efficiency.
The stable character of the Canadian banking system carried it through the global financial crisis. Maintaining a policy of solid funding and fiscal restraint regarding consumer lending proved essential to the system’s performance during the crisis. Canadian regulators pushed back when faced with pressure from bank executives to loosen lending restraints during the economic boom. As a result, Canadian banks thankfully found themselves in a favorable position when the global financial crisis finally hit.
The strong position enjoyed by the Canadian banking system has made it an asset to the economy at home and abroad. The contribution made to the economic growth of Toronto in particular is significant. Toronto houses the head offices of Canada’s five largest domestic banks and 41 of the 50 foreign-based banks operating in Canada. Almost half of employment in Toronto’s financial sector is attributable to Canadian banks. In The Banker’s 2014 report on international financial centres Toronto ranked sixth overall and among the world’s top 10 for total bank assets.
The Canadian banking system continues to establish itself on the global stage. In 2014, five Canadian banks were among the world’s largest 50 banks by market capitalization, and three of these – Royal Bank of Canada, Toronto-Dominion Bank and Scotiabank – placed in the top 25. The focus on innovation in the Canadian banking system is a testament to the system’s continued commitment to growth.