Unlike the US economy, Canada wasn’t hurt as badly when the Lehman Brothers collapsed in September of 2008. The country outperformed its southern neighbor during the most crucial and sensitive time for the global financial market. Although Canadian banking and finance has its own strenghts and weaknesses, their tight bank regulations, strict government controls and conservative banking practices allowed them to withstand the torments of the global recession.

Cultural differences also play a major role on how Canadians were able to survive the economic downturn. Since Canadians, in general, are less likely to take significant risks and they don’t like the idea of pling up debts, this kind of thinking spared them the financial problems that bedeviled the US and other developed countries – weakened currency, banking crisis, housing bubble, and piling public debt. The country also did not have to provide bailout to its major banks unlike what happened in the US.

Canadian banks’ six oligopoly practice also helped them to mitigate the effects brought about by the recession. Due to this conservative banking practice, Canadian banks did not have to lower their lending standards just to attract more customers. Because of this, most Canadian banks escaped the financial downturn unscathed. However, such practice is also considered as their weakness since this provide Canadian banks more control and they don’t basically have to compete against each other in order to earn more profits and revenues. Though this greatly works during the bad times, it is less desirable and ineffective practice duringt he better times.

Canada is known to have the lowest debt burden among any G8 country, thus attracting more investors to acquire Canadian stocks and bonds. The strong housing market of Canada also helped the country to move pass the effects of recession. Although house prices in the six largest cities of Canada have increased immensely over the recent years, homeowners who have fall behind their mortgage payments still remained on its all-time low.

Canadian banks are also quite strong and well managed by the Canadian financial sector. Due to good management and well regulated banking system, banks in Canada were able to spare themselves of problems concerning mortgage backed securities as well as sub-prime mortgage crisis. Amidst the intense global recession, Canadian banks have successfully secured their assets, protected their capital, and remained stable.

During the time when banks in Canada were plagued with the worldwide financial crisis, the government helped them increase their liquidity without needing bailouts. The country’s unwavering support and strong commitment to open market and free trade also aided Canada’s financial and banking sector to overcome the worldwide recession.