BARBADIANS DOING BUSINESS with locally based Canadian banks can be assured of their financial safety, which is being supported by Canada’s robust regulation of its financial institutions. Dr Warren Jestin, senior vice-president and chief economist at Scotia Economics of Scotiabank in Toronto, Canada, said that “guarantee” was also supported by Canada’s strong banking system and low-risk lending practices. Jestin, who met with some of Scotia’s clients and potential customers during a visit to Barbados last week, told BARBADOS BUSINESS AUTHORITY that in light of the current international financial turbulence, “The good news is that over the past three years Canadian banks have emerged as the strongest in the world.”
He pointed to Canada’s Office of Superintendent of Financial Institutions’ traditional application of “very stringent” capital rules and its requirement of prudence above accepted international standards. The economist noted that Canada’s concentrated banking system meant the existence of only a few banks that were highly capitalised. “It is not a bunch of small banks as you find in the United States or in some other countries but fairly large international banks. The third and probably most important [reason that Canadian banks are strong] is that we never got into the high-risk lending in a way that, say, US banks did. Subprime lending was insignificant in Canada,” Jestin pointed out.
Moreover, he said the strength of Canadian banks augured well for their expansion. Royal Bank of Canada completed a US$2.2 billion acquisition of Royal Bank of Trinidad and Tobago on June 16, 2008, creating one of the most expansive banking networks in the Caribbean across 18 states, including Barbados. Canadian banks Scotiabank and FirstCaribbean International Bank also have a solid presence here and in the Eastern Caribbean. (SR)
