Mr. Klaus Regling:

It is an interesting comparison because Canada got through the crisis very differently from its neighbour and some European countries, but the banking structure in Canada is completely different. There are six large banks, almost equal in size. They had a much more hands-on supervisory system. What happened in the US, for instance, was that the originate-and-distribute model that contributed so much to sub-prime mortgages and the development of financial instruments that were rated triple A but worthless afterwards just did not feature in Canada. In Canada, when somebody wanted a mortgage, one went to the bank and it would proceed in the good old way of doing a credit analysis and then deciding whether to give a mortgage. In the US, this system did not exist any longer in the second half of the last decade. Everything was done by the financial markets. Nobody really did a thorough credit analysis, as a loan office and bank should do, and that is why it all got out of control. That was the origin of the global financial crisis. Canada just kept its old banking model whereby a mortgage was given by a bank. It also stayed on the books of the bank, and that is why the bank felt more responsible for doing a good credit analysis. It knew that if it did a bad one, it might end up with a loss. It is very interesting in that there was very different development in the two countries.