Those who think that “too big to fail” is the essence of the problem have to explain why Canada, with basically just five banks, has avoided crisis. Those who blame the Fed for keeping interest rates too low too long have to explain why Canada, which basically had the same interest rate experience we did, didn’t have anything like the same problems.(Emphasis added.)
So what’s Canada’s secret? Regulation, regulation, regulation. Much stricter limits on leverage, much stricter limits on unconventional mortgages, and an independent consumer protection agency for borrowers.
Without regulation, the fox is in charge of the hen house, and - sooner or later - the wolf will be at your door. It's twue, it's twue.