Research and describe Canada’s Banking system stability. – What is banking system stability? – Why have Canadian banks been historically stable? – Give examples of times when it has remained stable throughout crisis – Compare to US banking system – Give recommendations for the future of Canadian banking system -Any other points to add good, relevant content.

According to The World Forum report, the Canadian banking system has been ranked as the soundest banking system in the world for the last seven years (IMF, 2013). This means that banks in Canada are well capitalized, well regulated and well managed. According to an IMF report on the stability of the financial sector in Canada, the Canadian banks were found to have diversified assets and their composition has remained stable in recent years. This stability has been a consequence of historical decisions made which have guided the banking sector from the 19^th century. This paper seeks to describe Canada’s banking system stability in terms of the reasons that have made the system to be historically stable, provide evidence on how the sector have survived different financial shocks, compare the Canadian system with the U.S banking system and give recommendations on how this system can continue to be stable and strong in a changing financial environment.