"This report confirms that we can be proud of what we have achieved with our financial system over the last few years," said Minister Flaherty. "The actions taken by our Government have strengthened this system and prepared it to better face the challenges of an evolving financial world."
The review indicates that "the response of the Canadian authorities to the global financial crisis was swift and effective." The FSB also notes that the strength of Canada's economy and its financial system meant that no Canadian financial institution failed or required government support in the form of a capital injection or debt guarantees during the global financial crisis.
"This resilience, which was achieved in spite of Canada's relatively complex regulatory structure, highlights a number of key lessons for other jurisdictions," the report said.
These key lessons include:
Pro-active and targeted macroeconomic policies, supported by adequate fiscal space and a flexible exchange rate to help absorb external shocks.
Prudent bank risk management, particularly a stable and well-diversified funding profile as well as conservative loan underwriting standards.
A comprehensive regulatory and supervisory framework that effectively addresses domestic prudential concerns, including (when necessary) by adopting regulatory policies that go beyond international minimum standards.
The FSB conducts peer reviews to examine steps taken or planned to address International Monetary Fund and World Bank recommendations on the financial systems of member countries.