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Toronto as Global Financial Centre

You are aware that the prorated share of 'attention' given to Canada will be identical in the continental scheme as the current set up right? In any case, if 10% is as 'good as zero' how exactly do you resign yourself to a scheme where we would get, at best, 3% of attention?
Yes, but this prorated scheme will not be giving 80% of its attention to one nation. It will be giving 20% of its attention to China, another 20% to Europe, another 20% to the US, 10% to Japan, and so on.

Umm... I never said we should have the financial sector 'crowd out' exporters which is probably why you opted against actually using the quote tool. What I said was that it makes no sense to constrain the financial sector out of the ludicrous belief that it would crowd out the manufacturing sector in any meaningful way.
Anglo Disease. Look it up. For the third time, exporters != manufacturers, and manufacturers != exporters.

My concern is that Canadian business' in every sector (service and goods producing) should have better access to the US and Mexican markets.
This is the purpose of NAFTA, though the most important player is choosing when to follow the rules.

A continental securities regulator would help both by making it easier for Canadian corporations to secure financing from the USA.
Are you sure this has nothing to do with the Federal Reserve's policy of lower interest rates than the Bank of Canada? What we won't need right now are billions in US Dollar Carry Trades going on at the same time when trillions of dollars of Japanese Yen carry trades are unwinding quickly.

Foot strait into mouth. HSBC isn't a Hong Kong company... It is incorporated in the UK and HQed in London. It has operations in HK which operate under local regulations, but so does every foreign company that operates there (like, say, AIG). Even that aside, HK financial regulations are practically nonexistent. They certainly didn't prevent anyone from 'going too far,' they didn't do anything.

HSBC may also need to raise money - £20bn in the view of analysts at Morgan Stanley. But although it is headquartered in London and formally the responsibility of the UK, the Hong Kong Monetary Authority (a lesson here for the Bank of England and FSA?) has independently regulated its Asian operations, and strictly. It is not - a Barclays, RBS or HBOS - yet. UK depositors owe Hong Kong a thank you.
http://www.guardian.co.uk/commentisfree/2009/jan/18/recession-banking

Yes, there is. Every Canadian business inevitably has to secure it's financing from the USA. Every single one. Stelco was financed by Americans when it was first created. Algoma was created by American financiers, Hollanger int'll was created by American financiers, the entire Canadian car sector was funded by American money. We are a capital short nation.
Are you sure this has nothing to do with the traditionally lower interest rates the Federal Reserve has been pursuing for decades?

Scotia, CIBC, RBC, TD, National, BMO. Care to name one of these 'hundreds of small banks we've never heard of'?
http://en.wikipedia.org/wiki/List_of_banks_in_Canada
 
Regarding Toronto as a Financial Center ...
It will be very hard to compete with countries who's populations are order of magnitudes larger then Canada ...

Toronto is not a country, and it is not competing with countries. It is competing with other cities and, like those other cities, experiences and intervenes in government policy as one of the influences on its competitiveness.

At 2.5 million people, Toronto is not an enormous city. But that should not prevent it from competing. Just ask Geneva, or Zurich.

A clusters approach here can work. I have mentioned the Egmont Group as an example of one -- the only, as far as I am aware -- international intergovernmental body headquartered in Toronto. They do not have a lot of staff, either. But the analysis and detection of financial laundering is a highly specialized area with a lot of cross-over into other financial services. Were Toronto to make it a goal to build on this area, including university partnerships with Egmont and a serious attempt to attract FINTRAC (or portions thereof) away from Ottawa, that could contribute to one corner of the cluster. Anyway, it's something to build on.

4) If possible anything in the tech industry but I'm afraid we will not be able to compete with our suburban neighbors so we'll just need to concede on this one (at least downtown).

If Toronto views its own suburbs as competition, rather than a part of the local current strengths which it would do well to nurture and encourage and include in regional infrastructure, then it will certainly never become a global centre of much.

2.) Rich white people are hospital's main source of donations. Peter Munk Atrium comes to mind.

No. Donations come when aspiring donees cultivate potential donors. Cultivating potential donors requires involvement in their communities. There is no "White" community.

In recent years Toronto institutions have done well by expanding their fundraising efforts outside the Toronto "WASP" establishment families from which they were traditionally drawn. Toronto hospitals have benefitted very significantly from donations from the Jewish community: this article told the story, but now it's behind a pay wall. AGO had similar successes among the Italian community.

Such communities need not be ethnically-oriented. They just need to exist, and institutions need to go after them. Donations are not the province of any particular community, particularly not communities that do not exist.
 
Yes, but this prorated scheme will not be giving 80% of its attention to one nation. It will be giving 20% of its attention to China, another 20% to Europe, another 20% to the US, 10% to Japan, and so on.

I have no position on whether securities should be regulated according to pan-North-American rules (the more important part), and by a pan-North-American regulator enforcing those rules (the part that has been focused on).

However, this idea that a continental regulator would structure its workload according to national origin, so let's talk percentages, sounds pretty wonky. If I'm a continental regulator, I structure my workload according to the importance of each file. I do not put a $50m matter from Arizona ahead of a $2b Toronto offering. I do not put a $25m enforcement issue from Chibougamou ahead of a $2b Chicago meltdown. Nor a $25m Chicago meltdown ahead of a $1b enforcement issue from Chibougamou.
 
For many of our banks the majority of their market is local ... so by that standard yes Toronto is very small as Canada is very small.

You'll need to see a lot more foreign investments by our banks for them to compete with other larger banks on the world scale.

I did give a reason why European banks in small countries have access to a larger market.

I do agree it's not an either or issue though. Regarding the tech industry - you're right, our suburbs are part of Toronto and I should be referring to the region as a whole. With that said I think we can grow our tech dominance in Canada and in North America.
 
They should be credited for not making the same mistakes their foreign counterparts made.

The question is though, was it a conscious decision or a regulatory result. IIRC it was the Federal Government, not the banks, that decided that 40 year 0 down mortgages were bad. Other examples, I am sure, are available. Personally I think that under the same circumstances, our banks would have behaved much the same as US and European banks did.
 
One of the issues in the US was the banks bundling their mortgages and then selling them off on Wall Street. This caused them to lend to anybody because they knew they could pawn them off on somebody else. Canadian banks on the other hand were more disciplined in their lending practices because they kept most of their mortgages on their own books. Was this by government decree?
 
One of the issues in the US was the banks bundling their mortgages and then selling them off on Wall Street. This caused them to lend to anybody because they knew they could pawn them off on somebody else. Canadian banks on the other hand were more disciplined in their lending practices because they kept most of their mortgages on their own books. Was this by government decree?

http://www.canadianmortgagetrends.com/canadian_mortgage_trends/securitization.html

Here is a basic overview of the most widely used form of securitization in Canada:

Lenders originate mortgages
Lenders arrange these mortgages into groups (pools)
Lenders sell these pools as mortgage-backed securities (MBS) to the Canadian Housing Trust (CHT), a CMHC-run entity
The CHT sells Canada Mortgage Bonds (CMBs) to generate funds to buy lenders' mortgages
The CHT uses the MBS cash flows to make interest payments on these CMBs to investors.
...and the process repeats itself over and over.

The mechanism above lets investors make secure investments in Canadian residential mortgages by buying CMBs.

Because CMBs are fully guaranteed by the government, investors demand less interest on CMBs. That lowers the cost of funds for lenders, which in turn lowers interest rates for homeowners
 
Uncle Teddy, our banks' resilience has little to do with their own actions. Quite simply, until recently they were not allowed to make the ultra-risky forty year, no down payment loans that American banks were making. When Harper was elected, he moved to harmonize our system with the Americans. Fortunately, it wasn't long until the financial collapse, so our banks didn't have time to make too many of the loans.
 
I'd add that the types of mortgage instruments were also a very big problem along with the 40 year duration - and made worse when coupled with the the no money down approach. At forty years, one is essentially renting from the bank. Also, being able to deduct mortgage interest was an invitation to acquiring some of the debt that has since been accumulated.

Fortunately we didn't see this happen here (with the exception of those few long-term loans that unimaginative already mentioned).
 
Regarding 40-year mortgages, many Canadian lenders adopted a practice, either explicitly or informally, that to get a 40-year mortgage, you would have to qualify under the debt service ratio based on a 25-year or 30-year amortization. This eliminated some of the most marginal borrowers.

In addition, mortgages in Canada were not given with unrealistically low "teaser" rates for the first two or three years, to be followed by a "reset" to a much higher rate. These were irresponsibly given out widely in the U.S. It's an invitation to disaster. The simple mathematics of a mortgage indicated that in many cases, the low initial rate wasn't enough to even cover interest, at the true cost of funds, never mind any principal. The interest shortfall was capitalized (added to the principal), and the balance outstanding went up instead of down.

You really have to shake your head at what happened, quite widely, in the U.S. in recent years.
 
Uncle Teddy, our banks' resilience has little to do with their own actions. Quite simply, until recently they were not allowed to make the ultra-risky forty year, no down payment loans that American banks were making. When Harper was elected, he moved to harmonize our system with the Americans. Fortunately, it wasn't long until the financial collapse, so our banks didn't have time to make too many of the loans.

Didn't know that. Thanks.
 
Regarding 40-year mortgages, many Canadian lenders adopted a practice, either explicitly or informally, that to get a 40-year mortgage, you would have to qualify under the debt service ratio based on a 25-year or 30-year amortization. This eliminated some of the most marginal borrowers.

In addition, mortgages in Canada were not given with unrealistically low "teaser" rates for the first two or three years, to be followed by a "reset" to a much higher rate. These were irresponsibly given out widely in the U.S. It's an invitation to disaster. The simple mathematics of a mortgage indicated that in many cases, the low initial rate wasn't enough to even cover interest, at the true cost of funds, never mind any principal. The interest shortfall was capitalized (added to the principal), and the balance outstanding went up instead of down.

You really have to shake your head at what happened, quite widely, in the U.S. in recent years.

I am shaking my head. The banks are private corporations, they should be able to do whatever they want, within the limit of the laws of course. If they made a mistake, then they should go bankrupt. Companies take risks all the time. Sometimes it works out, sometimes it doesn't. That's part of a market economy.

What's next? We tell Apple that you can't design tablets because nobody is going to buy them? Or we tell google, iphone is selling great, Android doesn't stand a chance, you should concentrate on searching?

If a company made a mistake, another company could replace it. What if the government made a mistake?
 
Perhaps in a theoretical world archanfel but the reality is that your Apple / Banking analogy is not a direct comparison. The extent to which we as citizens of modern industrial nations cannot make the distinction between the potential failure of Apple and say Bank of America says a lot about how deeply we have cocooned ourselves in a carefree bubble of naivity.
 
Perhaps in a theoretical world archanfel but the reality is that your Apple / Banking analogy is not a direct comparison. The extent to which we as citizens of modern industrial nations cannot make the distinction between the potential failure of Apple and say Bank of America says a lot about how deeply we have cocooned ourselves in a carefree bubble of naivity.

I'd rather think Bank of American being too big to fail shows how deeply we have cocooned ourselves in a carefree bubble of communism and consumerism. While the dismissive altitude towards one of the most innovating companies left in the western world also shows how twisted our priorities are. If Bank of American is really too big to fail, then maybe we should think about how to decouple from them rather than tie them even closer to our own financial future.
 

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