Canada’s role in the global banking system (1970s – early 2020s)

On the basis of international and national statistical reports the article examines how Canada’s role in the global banking system has changed since the early 1970s until now. Throughout almost the entire period under study the country’s share in world banking assets, despite some fluctuations, exceeded its share in the world GDP. For many decades, the Canadian banking community managed to maintain a strong international position and overcome various economic crises, including the Great Recession of 2008–2009, without significant losses. The stability could be explained by the long-standing institutional features of the Canadian banking system (for example, practice of regular license renewal), as well as a fairly flexible combination of market freedom and government regulations during the period under review. Canada’s position in the rankings has changed as follows: being the sixth largest power in the global banking in 1970, the country went down to 12th position by the mid-1990s, but then began a new ascent, and returned to sixth place in 2020. Canada’s current share remains somewhat lower than in 1970, which could be explained by a significant increase in the number of countries operating at the global banking arena. Toronto is the undisputed leader in banking among Canadian cities; back in the late 1970s it got away from its main competitor (Montreal) against the challenging political events of that period. Currently, Toronto ranks sixth in the world in terms of the total assets of local banks. The next most important centers (Montreal, Levis and to some extent Edmonton) also enjoy a fairly great and stable prestige within the global banking system. Despite the dominance of Toronto, the continued independent role of these financial hubs gives additional stability to Canada’s banking community.