{"id":6661,"date":"2009-05-26T14:59:38","date_gmt":"2009-05-26T18:59:38","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=6661"},"modified":"2009-05-26T14:59:38","modified_gmt":"2009-05-26T18:59:38","slug":"puff-piece-on-osfi","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=6661","title":{"rendered":"Puff Piece on OSFI"},"content":{"rendered":"<p>OSFI has republished a puff-piece written for <a href=\"http:\/\/www.centralbanking.co.uk\/\">Central Banking magazine<\/a>, titled <a href=\"http:\/\/www.osfi-bsif.gc.ca\/app\/DocRepository\/1\/eng\/osfi\/osfi_cbnk_e.pdf\">Lessons for Banking Reform: A Canadian Perspective<\/a>, by Carol Ann Northcott &#038; Graydon Paulin of the Bank of Canada and Mark White of &#8230; OSFI.<\/p>\n<p>Credit for Canada&#8217;s performance throughout the crisis is given to:<\/p>\n<ul>\n<li>High levels of capital\n<li>A rational mortgage market\n<ul>\n<li>relatively low Loan-to-Value\n<li>Recourse to borrower\n<li>Non-deductability of interest<\/ul>\n<li>Assets-to-Capital (ACM) multiple control\n<li>lack of competition from shadow banks\n<li>The wise and beneficient supervision of those sadly underpaid geniuses (genii?) at OSFI<\/ul>\n<p>Not much meat on these bones, frankly. I would have been much more interested in a solid analysis of just WHY we were so lucky. Why weren&#8217;t the banks up to their necks in sub-prime paper, like everybody else? Was it the ACM? Was it because Canadian banking is such a profitable rent-extraction machine that banks didn&#8217;t need to lever up on Sub-prime at LIBOR+50? I find the idea that &#8220;Canadian Bankers are Smart&#8221; rather difficult to swallow. We nearly went bust in the MBA crisis of the 1980&#8217;s &#8230; we&#8217;ll find something else soon, don&#8217;t fret.<\/p>\n<p>And why are we so highly capitalized, anyway? It has been very useful in the downturn, there&#8217;s no denying that &#8230; but what are the net, through-the-cycle cost\/benefits of tying up a lot of capital in the banking system?<\/p>\n","protected":false},"excerpt":{"rendered":"<p>OSFI has republished a puff-piece written for Central Banking magazine, titled Lessons for Banking Reform: A Canadian Perspective, by Carol Ann Northcott &#038; Graydon Paulin of the Bank of Canada and Mark White of &#8230; &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-6661","post","type-post","status-publish","format-standard","hentry","category-interesting-external-papers"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/6661","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6661"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/6661\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6661"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6661"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6661"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}