One humiliating part of the meltdown of our banking system has been the relative health of Canada's banks. They avoided the huge real estate boom we went through, and subsequently avoided the mortgage meltdown and nosedive in housing prices. How'd they manage that?He's linking to a Washington Post story, Worldwide Financial Crisis Largely Bypasses Canada , which makes these points,Â but both he and the Washington Post miss the diversity aspect.
The Washington Post reports that strict standards on mortgage lending and tougher default rules helped. In Canada, it's much tougher to walk away from your mortgage. But what probably helped most of all is that Canada didn't fall for the home ownership hooey that the US government adopted as its national policy. In fact, in Canada you can't even deduct mortgage interest! [Why Canada Isn't Broken]
Canada has its own problems with diversity, yes, but it doesn't have twenty million illegal aliens, millions of legal Hispanic immigrants, or the US's underperforming African-American population, all of which provided the political impetus for the relaxing of mortgage standards.