Recent bank failures in Canada were primarily due to the banks

Question

Quizplus · Accepted Answer

Recent bank failures in Canada were mainly due to the lending practices that exposed the banks to local shocks within the economy. Some banks had overly concentrated their lending in certain industries, such as energy, which were hit hard by the downturn in commodity prices. As a result, these banks suffered losses and had to be acquired or bailed out. The Canadian economy did not face a severe recession, and the banks were not lending primarily to firms in developing nations or U.S. customers. Historically low interest rates may have contributed to the banks' profitability, but they were not the cause of the failures.

Recent Bank Failures in Canada Were Primarily Due to the Banks