So what accounts for the genius of the Canadians? Common sense. Over the past 15 years, as the United States and Europe loosened regulations on their financial industries, the Canadians refused to follow suit, seeing the old rules as useful shock absorbers. Canadian banks are typically leveraged at 18 to 1—compared with U.S. banks at 26 to 1 and European banks at a frightening 61 to 1. Partly this reflects Canada's more risk-averse business culture, but it is also a product of old-fashioned rules on banking.

i watch zakaria's show on cnn every weekend, and he is knowlegeable about just about everything, not just economics. the only criticism i have is that i would not give credit for avoiding the financial meltdown to the bankers. my understanding is that when the american banks began merging into mega-banks, the canadian banks wanted to do the exact same thing in order to be able to compete.

but there was some politically powerful trade organization of small business in canada that opposed it. i'm not canadian, so maybe someone else can flesh out the details. but i believe the bankers themselves wanted to be just as stupid as the american banks, but were blocked by the political process. so i would give the credit to the canadian political system, not to any brilliant decision making by the bankers themselves. they were ready and willing to go down the same path as citigroup and bank of america, but their lobbyists couldn't get their legislation passed to let them do it.