The Canadian banks are old legendary institutions that have stood the test of time. They remained a beacon of stability during the financial crisis and came our relatively unscathed. This is because, the Canadian institutions have always remained focused on long term growth and always been a bit conservative than their US counterparts. It is for this reason, that the Canadian banks almost always find a spot or two featured in the list of safest banks in the world.
However, the Canadian economy is facing plenty of headwinds thanks to the collapse of the oil and commodity markets, recent recession and the possibility of a housing bubble bursting. As a result, the Canadian dollar (Loonie) has suffered losing approximately 50% of its value since its peak in the post financial crisis years.
In this article, I discuss two major threats facing the Canadian banks and provide an outline for both Canadian and US/International investors on what to expect.