Canadian Banks escaped the 2008 financial crisis without criticism. Strong statements by Canadian leaders convinced financial reporters to ignore digging deeper for information on their health:

"It is true, we have the only banks in the western world that are not looking at bailouts or anything like that...and we haven't got any TARP money." ~ Stephen Harper, Prime Minister CNBC, Interview on the Kudlow Report, February 23rd, 2009. http://video.cnbc.com/gallery/?video=1043703424

"In addition, our financial institutions, particularly our banks, are well capitalized and strong, and our household balance sheets are strong as well." ~ Jim Flaherty, Minister of Finance speech to the Calgary Chamber of Commerce, October 23, 2008

"So what did we do in Canada? Well, in October, we were in an election campaign and so it's unusual for a government to do this, but we did move forward because we had to, to guarantee the international debt of our banks, which we did, and also to provide capital to our banks by purchasing CMHC mortgages, which are ensured mortgages by the government of Canada. That provided some capital to our banks and we did that precipitously during the election campaign which is unusual for any government. But we also did it so that our banks would not be at a competitive disadvantage internationally because of the intervention of other governments with respect to their banking systems." ~ Jim Flaherty, Minister of Finance speech at Canada-UK Chamber of Commerce, April 3, 2009

Come on Jim, fess up, you gave the banks a whole bunch of money, and Uncle Ben from the US Federal Reserve partnered with you.

An April 12, 2012 report from the Canadian Center for Policy Alternatives, The Big Banks' Big Secret estimates that:

"By March 2009, government supports to Canada's banks peaked at $114 billion. At this point, support for Canadian banks was equivalent to 7% of Canada's 2009 GDP. That support represents a subsidy worth about $3,400 for every man, woman and child in Canada."

Without the intervention, Canada would have lost 3 major banks, with two bleeding badly.

There must be a great fear that the next financial crisis in Canada will be too big for government to tackle. Changes were coming in the April Canadian Federal Budget that would put Canadian banks on equal footing with Cyprus.

Comments from Bank of Canada governor Carney and Jim Flaherty in March were calling for prudence by Canadian banks:

"Canadian fixed income markets, the Repo markets, the core funding markets seized up during the crisis, and that's not acceptable. It's not an acceptable state of business." ~ Mark Carney, Bank of Canada governor, The Record April 4, 2012

Carney's comment followed Flaherty's warnings to two financial institutions in March:

"My expectation is that banks will engage in prudent lending - not the type of 'race to the bottom' practices that led to a mortgage crisis in the United States," ~ Jim Flaherty, Globe and Mail, March 4, 2013

Flaherty's warning was after Bank of Montreal reduced its price on five-year fixed-rate mortgages to 2.99 per cent from 3.09 per cent. Later in March Flaherty warned Manulife about the race to lower mortgage rates. Manulife promptly stopped the sale:

"After consulting with the Department of Finance, Manulife Bank has withdrawn the promotional campaign and reverted to our previous posted rate," said Graeme Harris, a spokesman for Manulife, Financial Post, March 13, 2013

Flaherty received criticism from all fronts about his interference in the free market, but "Canadian Banks" and "Free market" is an oxymoron.

The underreported change came in the April 23, 2012 Federal Budget:

"The Government proposes to implement a bail-in regime for systemically important banks. This regime will be designed to ensure that, in the unlikely event that a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital."

Ian Campbell analyses the change: Deposit Confiscation: Can it happen here?

Who cares? Canadian banks have far outperformed their US counterparts since the financial crisis.

Is it an illusion?