I wonder what the costs to the economy would be if we had Canadian levels of regulation of the financial industry, or even greater (something like how utilities themselves are regulated).
Canada believes in allowing only a few, highly regulated banks. Since there are only a handful of banks, it makes it very easy to regulate them.
But this model does hurt the little guys. Since Canadian banks form an oligopoly, they charge you for lending them money; account maintenance fees are standard. This hurts the smallest savers the most. Similarly, there is minimal competition in setting interest rates. Finally, financial innovation, done right, does help people---think Vanguard, index funds, ETFs, etc. All much more limited and much more expensive in Canada (I think).
In contrast to Canada, I think we would be better off with many small institutions, lightly regulated. Then they can compete for your business and do not need taxpayer support when they fail. When they become too big, break them up.
The banking system in Canada is not significantly different than the United States, except that it is just a banking industry. The U.S. has a banking/gambling industry. Actually it's more of a gambling industry with a small banking sideline.
