Washington consensus and Wall Street wizards

At a financial sector conference in Shanghai last week, Canadian bankers, insurers and government officials cited the country's relative stability in the face of Wall Street's 2008 meltdown as evidence that China should reference 'the Canadian Difference,' as one put it, as it pursues its own financial reforms.

It was Henry 'Hank' Paulson circa 2007, with perhaps more humility.

'Canada's financial system might serve in some way as an example,' Sarah Kutulakos, executive director of Canada China Business Council, declared at the opening of the conference.

Canada weathered the crisis well. For instance, it has already gained back all the jobs it lost in that period, and the International Monetary Fund has predicted it will be the strongest economy in the G-7 through 2011, with 2.7% expansion next year.

'It's the world's safest banking system,' said Chuck Strahl, minister of transport, infrastructure and communities, referring to a World Economic Forum assessment.

Four of Canada's banks now rank among the 10 largest in North America, he added. And Canada's strength, he noted, was recognized by China when it made the country among the first bank regulators green-lighted as an international destination for individual investment money.

Other speakers noted the ability, during the crisis, of Canadian banks to tap credit markets and Ottawa's effective backstopping of the nation's financial system, which was designed to minimize risks to taxpayers.

'What is this Canadian difference?' asked Gilles Oullette, a top officer at Bank of Montreal, which this month became the first Canadian bank to locally incorporate an operation in China. Mr. Oullette said the core Canadian difference is a clear regulatory structure, which helps define a 'more conservative approach' (i.e., more conservative than south of the border).

Speakers highlighted how China sidestepped the bad times, too.

'It appears Canada and China have come through extraordinary times much better than their G-20 counterparts,' said Mark Kruger, minister-counselor at Canada's Beijing Embassy.

Mark Rowswell, perhaps the world's most famous Canadian due to his fame in China, where he is known as Da Shan, pointed out that the Canadian pavilion at the World Expo, where this event was held, recently won an award for being one of the most 'business-oriented' on the fairgrounds.

Yet, when officials moved from offering context of the Canadian difference and turned toward giving advice, they sounded off on many of the very same themes that have been broadcast from Washington for years, including Mr. Paulson's 2007 speech calling for faster reforms. They cited Chinese needs to permit more credit to flow into the private sector, a level playing field for foreigners and improvements in regulatory transparency.

BMO's Mr. Oullette, for instance, called on China to improve the flow of market information, to build strong and independent regulatory bodies and to allow for 'a more market-sensitive currency exchange.'