The Need for Modesty in Canadian Banking
This report, by CCPA research associate and Wilfred Laurier professor Ellen Russell, examines how banks work, why they are inherently prone to instability, and how banking crises spread—even to banks and banking systems that appear to be stable. The report cautions that current regulations have not eliminated problems with risk-taking and overconfident behavior among banks, and since governments have no alternative but to support large banks when systemic stability is threatened, this additional security creates a perverse incentive for banks to increase their appetite for risk.
