Structural Foundations of Financial Stability : What Canada Can Teach America About Building a Better Regulatory System

This Comment deconstructs and analyzes the structural regulatory factors that have helped Canada avoid banking crises since 1840. First, it empirically demonstrates the sharply divergent performance of the American and Canadian banking sectors during the recent financial crisis based on equity and credit default swap data, along with consumer satisfaction and credit availability. Second, the Comment assesses both nations' regulatory systems, highlighting how relative to the fragmented U.S. framework, Canada's streamlined regulatory architecture facilitates a stronger and more stable financial system. Third, with respect to regulatory costs, the Comment finds that, relative to the Canadian framework, the inefficiency of U.S. regulation costs taxpayers and regulated banks over $30 billion annually. Finally, after addressing counterarguments, the analysis concludes by suggesting realistic structural changes that could generate aggregate cost savings potentially exceeding $350 billion for taxpayers and $585 billion for the industry. Most importantly, however, these changes would facilitate economic growth while safeguarding financial stability for the future