A Comparison of the Canadian Financial system and the Financial System of Taiwan

A Comparison of the Canadian Financial system and the Financial System of Taiwan

Financial System of Canada

An Overview

Canada has nine national banks, 50 foreign bank branches and 37 representative offices of foreign banks. The major Canadian banks (so-called "Big Six"), which account for about 90% of banking assets are in the heart of Canada's banking system. They offer a wide range of financial services across the country, is set to expand. The major Canadian banks carry significant activities at the international level, the United States and in most other parts of the world. Canada's banks are well capitalized, which far exceeds the standards of the Bank for International Settlements. According to international standards, Canada has a conservative definition of bank capital. The big banks have very well developed branch networks (around 8,000) and automated teller machines (ATMs) (more than 12,500). The deposits, a relatively stable source of funds, represent two-thirds of bank deposits (Nivola & Courtney, 2010).

The branch structure and employment levels have been streamlined to some extent, partly due to technological changes, and it is estimated that Canada's banking system is very efficient. Given the increasing competition aroused by traditional sectors loan and deposit taking, income other than interest is a source of growing importance of bank revenues. Bank profitability has improved as the economy recovered and the loan losses decreased, although a large number of small subsidiaries of foreign banks has not fully benefited from the recovery. Since the financial sector reforms of 1987 and 1992, a phenomenon of concentration occurred in the Canadian financial services system, banks engaging in the securities business and trust activities, acquiring or launching companies. Recently, the government has worked with banks to improve the delivery of financial services to the small business sector (Nivola & Courtney, 2010).

Canadian Financial System

Chartered banks of Canada and their subsidiaries (see appendix) are at the heart of the Canadian financial services system. With the exception of the areas of insurance and auto leasing, including their access is restricted by law, they play a major role in almost all segments of the financial services market in Canada. They have always been central to the activities of deposit-taking and commercial lending, since the reforms of 1987 and 1992, they are increasingly present in the areas of securities and trust activities (Nivola & Courtney, 2010).

The major Canadian banks are long since considered important participants in the international arena, although by international comparisons their importance has declined over the last thirty years, due to factors such as currency fluctuations and expansion taken by banks worldwide. However, large banks still derive a significant proportion of their income (30%) of the operations they conduct abroad, the United States and other countries. For example, they are increasing their presence in the new countries of the Pacific Rim and the Far East. Canada's banks are also increasingly active in global foreign exchange markets and derivatives (Nivola & Courtney, ...