Canadian banks the soundest in the world: report
CTV.ca News Staff
Published Thursday, October 9, 2008 1:52PM EDT
In the midst of a global market crisis, a survey by the World Economic Forum has proclaimed Canada to have the world's soundest banking system.
Placing just behind were Sweden, Luxembourg, Australia and Denmark in the World Economic Forum's Global Competitiveness Report, released on Wednesday in Switzerland.
Twelve-thousand corporate executives around the world were interviewed on a number of questions and ranked banks around the world on a scale of one to seven -- one being insolvent and possibly in need of government assistance and seven being entirely healthy.
Canada's banking industry, led by Royal Bank, CIBC, Scotiabank, TD Bank, Bank of Montreal and National Bank, was given a rating of 6.8, the best ranking of any banking system in the world.
The top 10 soundest banking countries are as follows:
- Canada (6.8)
- Sweden (6.7)
- Luxembourg (6.7)
- Australia (6.7)
- Denmark (6.7)
- Netherlands (6.7)
- Belgium (6.6)
- New Zealand (6.6)
- Ireland (6.6)
- Malta (6.6)
The report was cited by Conservative Leader Stephen Harper on Thursday as proof that Canada's banks are the strongest in the world and need no government help.
"There is no question, no possibility of bailing out the banks," Harper said at a campaign stop in Richmond, B.C. "The banks aren't seeking to be bailed out, the government won't be bailing them out. That isn't going to happen."
The BNN's Michael Kane told CTV Newsnet that the results were remarkable in light of the fact that the United States (4.0) and Germany (3.9) fell to the level that banks in very depressed parts of the world sit.
"This is a real feather in the cap of Canadian banks and this sort of buttresses what the government and also what the Bank of Canada has been saying about our system here," Kane said. "We are in relatively good shape."
Kane said Canadian banks are well capitalized and there has never been any threat to the dividend.
"People have not felt bad about putting their money into bank accounts on the retail side or dealing with banks on the small business side. It's very positive."
The report also placed Canada tenth in overall global competitiveness; a list which was topped by the United States.
The World Economic Forum is a global non-profit foundation renowned for its annual meeting in Switzerland that brings together business leaders, politicians, intellectuals and journalists to discuss world issues.
Its report contains a detailed economic profile for each of the 134 countries featured in the study, summarizing the overall position in the rankings as well as the most prominent competitive advantages and disadvantages.
With files from The Canadian Press