It's Right In Front Of Your Face

Or, rather, north of it. Evidence, that is, that regulation isn't just some silly hogwash come up with by lilly-livered nanny-state homos with nothing better to do than to interfere with good old-fashioned, red-meat capitalism. Blame Canada.

"We should be proud of the performance of our financial system during the crisis," [Canadian] Finance Minister Jim Flaherty said. He recalled visiting China in 2007 and hearing suggestions "that the Canadian banks were perhaps boring and too risk-adverse. And when I was there two weeks ago some of my same counterparts were saying to me, 'You have a very solid, stable banking system in Canada,' and emphasizing that. There wasn't anything about being sufficiently risk-oriented." The banks are stable because, in part, they're more regulated. As the United States and Europe loosened financial regulations over the past 15 years, Canada refused to do so. The banks also aren't as leveraged as their U.S. or European peers. There was no mortgage meltdown or subprime crisis in Canada. Banks don't package mortgages and sell them to the private market, so they need to be sure their borrowers can pay back the loans.

Imagine that.