Canadas’Financial Institutions and Policy Accounting, Finance Essay (Essay Sample)

Canadas’Financial Institutions and Policy
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Introduction
A financial and economic crisis usually involves interactions among diversified countries and markets in the globe. Canada, in particular, stood out among the five major economies namely The United States, United Kingdom, Greece, Iceland, and Canada during the 2008-2009 financial crisis. Canada originally suffered together with other established economies but knowledgeable minimal downturn which was accompanied by a quick recovery and financial stability. It is with this effect that countries' regulation, supervision, exposure to the initial crisis and the monetary policy are determined. Initial financial soundness is considered as the key factor in surpassing all the financial crises.
Comparison between Canada and the United States.
In the United States, the Government-Sponsored Enterprises were violating industry best policies routinely and intentionally. They were assessing risks and making loans which are considered as a violation in the financial and economic environment. The liabilities of these institutions did not reflect on either the public or the private balance sheets meaning they happened outside the banking sector. By 2007, there was an accumulated $5.9 trillion in the unaccounted resources of the last lender resort. Meanwhile, mortgage insurers had maintained insufficient capital stocks although they were paying more to cover accelerating defaults.