Right, I understand that point of view. Canada has fewer banks compared to the US which has both big and many smaller banks. Whereas the US has had over 500 bank failures in the last 20 years, Canada has had zero.

There is actually a split in interpretation as to why Canada has fewer bank failures. The more economically conservative interpretation is that it’s because Canada has fewer more powerful more concentrated banks. These people say it has little to do with good regulation (regulation bad!). We should just continue to give more power to the most powerful players. The more economically progressive interpretation is that it’s because Canada has stricter banking regulation that doesn’t allow for as much reckless risk taking. And this is empirically true. Canadian banks are more diversified and well capitalized due to regulations.

For my part, the conservative interpretation seems obviously false. Many very large banks have failed in the US, including SVB and Signature recently, and, famously, Washington Mutual in 2008, which was a huge bank. in fact, the conservative interpretation is kind of hilarious to me given that US bank failures lead to the creation of the expression “too big to fail“.

The concern is doing that and then ending up like the US, where regular bank failures are a thing.

There's zero concern of ending up like the US, it's a level of fuckedupness impossible to replicate at this point