Some Historical Remarks on American and Canadian Banking Reform

Abstract

This article makes several historical remarks on the structural differences between the Canadian and American banking systems. It argues that consideration of the context, form, and substance of banking legislation can help determine the distinct regulatory culture of legislative reform; in comparison to the United States, Canada's response to financial crisis is noticeably conservative. Part II of the article characterizes the regulatory steps taken by both countries during the years 1933–35. Part III provides basic background to the current banking legal regime in Canada; a discussion of the dual banking system in the United States is beyond the scope of this article. Part IV concludes by discussing the global financial crisis in 2008 and contemplates whether several themes from 1933–35 resurface despite legislative development throughout the historical period. The historical approach highlights Canada's distinctive legacy of commercial banking regulation, which perhaps is still pertinent today when comparing banking laws, their enforcement, and their general impact on the respective economies.