The Canadian Banking System

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As compared to the US banking system, Canada has fewer banks; therefore, its financial system is more concentrated. Although highly concentrated, Canadian banks are generally more diversified, with expansion in wealth management, insurance, deposit and loans, and brokerage services. Further, the Office of the Superintendent of Financial Institutions (OSFT) was responsible to the Minister of Finance for the supervision of banks and federally regulated non-bank financial institution. With this in mind, the Canadian banking system was one of the most stable in the world with only two bank failure since 1923. From 1987 to 1992, several revisions were made to the Canada’s Bank Act, which required a bank to maintain adequate capital as well as adequate and appropriate forms of liquidity. The revisions helped decrease the barriers between the four pillars of Canada’s financial services industry: commercial banking, investment banking, trust, and insurance. More importantly, this changes led to the expansion of new services of major Canadian banks such as insurance, money management, retail brokerage, trust, and by 1980, Canada allowed foreign banks to enter its market. The Royal Bank of Canada (RBC) is the largest bank in Canada with over 16 million clients and 78,000 employees worldwide. The company headquarters is located in Ontario, Canada, and it was founded in 1864. In 1997, the RBC ranked the sixth largest bank of North America with assets of $245 billion. The RBC,
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