Canada's Banks: Well managed Well regulated Well capitalized

Canada’s Banks:
Well managed
Well regulated
Well capitalized
An overview 2009/2010

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The Canadian Bankers Association
Expertise Canada Banks On
While banks in Canada are healthy competitors, we come
together through the CBA as a credible voice that represents
the industry to consumers, government and the media.
As one of Canada’s strongest sectors, banks play a vital role
in the economy. Despite tough economic times, credit
from banks in Canada has continued to be available to
creditworthy businesses. Banks are also the largest source
of credit for small and medium-sized enterprises (SMEs).
Now more than ever, it is imperative that business and
Barbara Stymiest
government work together in a spirit of co-operation and
openness. The CBA, through its research and expertise,
adds value to such a partnership.
Barbara Stymiest
Chair, Canadian Bankers Association
(Group Head, Strategy, Treasury & Corporate Services, RBC)
The global financial crisis has been a wake-up call that
underscores the need for sensible regulatory structures
and sound business management practices. Our banks
have been recognized on the world stage as leaders for
being well managed, well regulated and well capitalized.
While the international attention is new, banks in Canada
have a proud history of helping our country prosper.
Together with employees, customers and investors, banks
have built an industry that is an integral part of the economic
fabric of our country. Today, our strong and stable banking
system is at the heart of Canada’s economic recovery and
Nancy Hughes Anthony
long-term growth.
Our intent is to ensure a strong financial services sector
for Canada.
I invite you to visit www.cba.ca to learn more about the
issues we face and the solutions we propose.
Nancy Hughes Anthony
President & CEO, Canadian Bankers Association

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Our banking system
Canada’s banking system is stable and competitive. In fact, the World Economic Forum ranks
Canadian banks #1 for soundness. That’s good for the Canadian economy, for consumers
and investors.
The Canadian advantage
Well managed
• Canada’s large financial groups are highly diversified and operate their businesses
profitably – creating jobs and wealth for Canadians.
• Banks in Canada have taken a sustainable and prudent approach to lending, avoiding
the financial di?culties banks in some other countries have faced.
• Canadian taxpayers have not had to bail out or inject capital into our financial institutions.
Well regulated
• Canada’s banking system is federally regulated under the Bank Act and has a stream-
lined and e?ective regulatory system with oversight by the O?ce of the Superintendent
of Financial Institutions (prudential regulation) and the Financial Consumer Agency of
Canada (consumer regulation).
Well capitalized
• Banks in Canada are among the best capitalized in the world, exceeding international
standards. They have achieved this by raising new capital and through retained
earnings. This allows the banks to continue lending and provides a cushion against
loan losses.
A national system
• With operations across the country, banks in Canada contribute to regional growth
by funding local credit needs.
• Our national banking system gives consumers across Canada access to all products and
services at the most competitive price, whether they live in a rural or urban community.
Regulatory reform – what is needed
Canada’s banking system operates independently,
but welcomes reforms that stabilize the global
financial system as a result of the recent
international financial turmoil. In fact, on
85 per cent of Canadians say
the world stage Canada is a recognized
responsible lending has
global leader in financial services and many
countries are looking to Canada as a model.
contributed to the e?ectiveness of
Canada’s banking system, even in
a period of financial turmoil.
The Strategic Counsel – May 2009

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Single securities regulator
While our financial regulatory system is strong, the CBA supports the need for a single
securities regulator in Canada. There have always been good reasons for the creation of a
single regulator – improved investor protection, greater e?ciencies in the capital markets
and a reduction in the cost of raising capital for businesses large and small – but the recent
financial situation has made structural reform more crucial than ever.
Banks and the economy
Why a vibrant financial sector is so important to Canada:
• Contribution to GDP – Canada’s banking sector contributes nearly $40 billion annually
to Canada’s GDP, representing more than three per cent of the total economy.
• A trusted financial advisor and wealth manager – the banking industry helps millions
of Canadian consumers save and invest to achieve their financial goals, including
retirement.
• Financing for small and medium-sized enterprises – banks are the largest source of
credit for SMEs.
• Opening new markets and financing international trade for Canadian businesses
– approximately 40 per cent of Canada’s GDP comes from exports.
• Employment – more than 260,000 Canadians work for bank financial groups in
communities across Canada.
Canada’s banks – lending to businesses
• Despite tough economic times, credit has continued to be available to creditworthy
businesses.
• Lending to businesses continues at a sustainable pace, and banks have helped fill a
credit gap as some other lenders have slowed their financing or pulled back completely.
In Budget 2009, the federal government introduced the Business Credit Availability
Program (BCAP). This program provides at least $5 billion for additional lending to firms
with a viable business model through Export Development Canada (EDC) and the Business
Development Bank of Canada (BDC), and promotes co-operation with private sector lenders.
Banks are actively working with this program as an extra e?ort to find credit solutions
for creditworthy business clients during this challenging economic time.
“The Canadian financial sector is among the
world’s most highly developed and o?ers
many examples of best practice.”
International Monetary Fund

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Fraud and security
Banks in Canada take privacy, security and fraud prevention very seriously. They work hard
to prevent their operations and customers from being used for any kind of financial crime
and they raise awareness about the ways that customers can protect themselves. In addition,
banks in Canada work in collaboration with law enforcement agencies, the federal govern-
ment and other partners to share information and combat criminal activity.
New security measures and technologies are regularly adopted, such as chip technology for
debit and credit cards. And when it comes to identity theft, banks have advocated making
it a defined offence under the Criminal Code of Canada. As well, the banking industry
has called for changes to make it illegal to possess multiple pieces of identification, to tra?c
in stolen personal information and to modernize the Code to deal with emerging criminal
tactics, such as phishing.
Banks and financial literacy
Many Canadians look to banks as a trusted source of financial information. Banks work in
their communities to provide consumers with the information they need to make sound
financial decisions.
The CBA supports financial literacy for young Canadians through our high school program,
YourMoney. Over the past decade, more than 180,000 students have participated in the
program, learning about budgeting, borrowing, saving, investing and protecting themselves
from fraud. The YourMoney program is o?ered in partnership with the Financial Consumer
Agency of Canada. Find out more at www.YourMoney.cba.ca.
“Canada has done more than survive this
financial crisis. The country is positively thriving
in it. Canadian banks are well capitalized and
poised to take advantage of opportunities that
American and European banks cannot seize.”
Fareed Zakaria, Newsweek – February 2009

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Fast facts
• 263,400 employees in Canada and more than 84,000 in other countries work for
Canadian bank financial groups.
• The vast majority of Canadians are bank shareholders through public and private
pension plans, mutual funds and stock holdings.
• 34 per cent of Canadians pay no monthly bank fees. A majority pay $10 or less,
with banks also o?ering low-fee accounts and special packages for seniors, youth
and students.
• The six largest banks spent $5.9 billion on technology in 2008.
• 80 per cent of banks’ small business customers report a positive relationship
with their bank.
• $84.9 billion in credit was supplied to more than 1.2 million Canadian small and
medium-sized businesses (2007).
• 53 per cent of customers reported using online banking in the past year.
• 19 per cent of earnings (six largest banks) came from outside Canada while
76 per cent of employees are based in Canada.
• $3.4 billion – taxes paid in Canada by the six largest banks
in 2008.
• 77 per cent of Canadians report a favourable impression
of banks – up three percentage points from 2008.
• 81 per cent of Canadians believe banks in Canada
are stable and secure.
88 per cent of Canadians think that
banks in Canada should continue their
long-established, prudent lending
practices throughout this period of
economic turmoil.
The Strategic Counsel – May 2009

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The Canadian Bankers Association
• Represents our member banks, which include domestic chartered banks, foreign
bank subsidiaries and foreign bank branches operating in Canada.
• Advocates for e?cient and e?ective public policies for the banking industry, our
customers, investors and the country as a whole.
• Promotes an understanding of the banking industry and its importance to consumers
and the Canadian economy.
The CBA advocates for public policies to strengthen Canada’s economy
• A competitive tax structure that promotes entrepreneurship and investment;
• A principles-based approach to financial sector regulation;
• A national approach to financial services regulation, including a single securities
regulator; and
• Legislation to protect consumers and financial institutions against fraud and other
financial crimes.
Visit www.cba.ca to learn more.
Contact us
Toronto
Commerce Court West
199 Bay Street, 30th Floor
Toronto, Ontario M5L 1G2
Tel: (416) 362-6092
Ottawa
Suite 1421, 50 O’Connor Street
Ottawa, Ontario K1P 6L2
Tel: (613) 234-4431
Montréal
Place Montréal Trust
1800, avenue McGill College
92 per cent of Canadians believe
Bureau 2480
that the strength of Canadian
Montréal, Québec H3A 3J6
banks is critical to the health of
Tel: (514) 840-8747
the overall economy.
PricewaterhouseCoopers – 2009

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