3 ms·

Canadian banks are the most profitable in the western world, because we pay the highest fees in the western world. A lot of it is hidden - Canadian banks charg

by cal5k 5y ago

Canadian banks are the most profitable in the western world, because we pay the highest fees in the western world. A lot of it is hidden - Canadian banks charge outrageous sums of money for foreign exchange fees. Credit card interchange fees are reliably a full 1% higher than in the US. e-Transfers are intentionally limited in size so that banks can still make their money on credit card payments etc. Interac is a bank-owned monopoly, and merchants eat astronomical fees even though it's nominally "free" to send an email money transfer to your plumber. The more you dig into the Canadian banking ecosystem, the more you realize how powerful it is and how much rent-seeking is really going on. The amazing part is that they've convinced the average Canadian that this oligopoly is actually good for them. Marketing works! Anyone working in the financial services space, however, understands that the reality is really much darker than people realize.

sbarre 5y ago
This is all true. What is also true is that Canada has never had anything like the S&L scandal in the 90s or the 2008 US financial crisis where massive swaths of the working class lost much of their savings. So sure, we have higher fees due to regulatory capture, but I'll take that trade to know that some unregulated finance bros aren't fucking around with my life savings.
- cal5k 5y ago
  Not just higher fees. Our GDP/capita relative to the US has been in steep decline. Cost of living is also higher across the board on everything from food to electronics, above and beyond what straight foreign exchange would suggest. Gas is more expensive too. Oh, and wages are stagnant (except for in tech), which is a real problem when inflation hits 5% (as it is now). Productivity growth has been basically non-existent for decades. Can I connect all of this to the banking oligopoly? No, but it's symptomatic of the larger problem: that Canada is a very difficult country to do business in. Ham-handed government regulation in every part of the economy is a huge drag on economic growth.

by cal5k 5y ago

sbarre 5y ago

This is all true. What is also true is that Canada has never had anything like the S&L scandal in the 90s or the 2008 US financial crisis where massive swaths of the working class lost much of their savings. So sure, we have higher fees due to regulatory capture, but I'll take that trade to know that some unregulated finance bros aren't fucking around with my life savings.

cal5k 5y ago
Not just higher fees. Our GDP/capita relative to the US has been in steep decline. Cost of living is also higher across the board on everything from food to electronics, above and beyond what straight foreign exchange would suggest. Gas is more expensive too. Oh, and wages are stagnant (except for in tech), which is a real problem when inflation hits 5% (as it is now). Productivity growth has been basically non-existent for decades. Can I connect all of this to the banking oligopoly? No, but it's symptomatic of the larger problem: that Canada is a very difficult country to do business in. Ham-handed government regulation in every part of the economy is a huge drag on economic growth.