Good and Boring by Paul Krugman

[Joanne98]

(edited for copyright purposes-proud patriot Moderator Democratic Underground)

By PAUL KRUGMAN
In times of crisis, good news is no news. Iceland’s meltdown made headlines; the remarkable stability of Canada’s banks, not so much.

Yet as the world’s attention shifts from financial rescue to financial reform, the quiet success stories deserve at least as much attention as the spectacular failures. We need to learn from those countries that evidently did it right. And leading that list is our neighbor to the north. Right now, Canada is a very important role model.

Yes, I know, Canada is supposed to be dull. The New Republic famously pronounced “Worthwhile Canadian Initiative” (from a Times Op-Ed column in the ’80s) the world’s most boring headline. But I’ve always considered Canada fascinating, precisely because it’s similar to the United States in many but not all ways. The point is that when Canadian and U.S. experience diverge, it’s a very good bet that policy differences, rather than differences in culture or economic structure, are responsible for that divergence.

And anyway, when it comes to banking, boring is good.

First, some background. Over the past decade the United States and Canada faced the same global environment. Both were confronted with the same flood of cheap goods and cheap money from Asia. Economists in both countries cheerfully declared that the era of severe recessions was over.

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http://www.nytimes.com/2010/02/01/opinion/01krugman.html

[tuvor]

1. How lucky for Harper to have inherited a system shaped by a Liberal government.

[Statistical]

2. I agree with that premise. Banking should be boring.

Stable like a rock and just as boring.

If "investment banks" which are really investment firms want to make bets fine I got no problem with them but they should be spun off from banking and no investment firm is too big to fail.

Boring Banks = deposits, insured, large, vital, systemic risk
Investment Firms (I would prohibit them from even calling themselves banks) = risky speculative, not vital, small, not insured, can fail