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Or just having far fewer banks that need to be involved, instead of the roughly 5k we have in the US.
by MBCook 4y ago
Or just having far fewer banks that need to be involved, instead of the roughly 5k we have in the US.
- eru 4y agoThe US has so many banks thanks to some earlier misguided regulation: In large parts of the US, it used to be illegal for banks to have branches. As you can guess, keeping your banks confined to one office in one city is a recipe for them being vulnerable to the fortunes of a single small area. In contrast, their neighbour to the north, Canada, had a much more stable banking system, that was run by large national chains (just like in most other parts of the developed world). If you want to learn more, George Selgin has written a lot on the topic. Other keywords to look for are 'unit banking' vs 'branch banking'.
- rkagerer 4y agoI'm from Canada. Our banking system is stable, but expensive and not very competitive.
- eru 4y agoI'm mostly familiar with more historic periods. See https://www.alt-m.org/2015/07/29/there-was-no-place-like-canada/ https://www.alt-m.org/2015/07/29/there-was-no-place-like-can... for some background that you might find interesting.