Nice piece by Chrystia Freeland* on lessons from Canada, the only G7 country to avoid a major financial meltdown.

I’ve always liked to cite Canada in economic discussions; as I once wrote,

Canada has often been a very interesting case–the country that defies the trends, that demonstrates by example the hollowness of the conventional wisdom of the moment.

And so it is with finance. Those who think that “too big to fail” is the essence of the problem have to explain why Canada, with basically just five banks, has avoided crisis. Those who blame the Fed for keeping interest rates too low too long have to explain why Canada, which basically had the same interest rate experience we did, didn’t have anything like the same problems.

So what’s Canada’s secret? Regulation, regulation, regulation. Much stricter limits on leverage, much stricter limits on unconventional mortgages, and an independent consumer protection agency for borrowers.

Barney Frank’s reform bill would move the United States a long way in Canada’s direction. And that may be the simplest way to explain why it’s a good thing, eh?

*But one small correction: Michael Kinsley didn’t make up the headline “Worthwhile Canadian Initiative”; it was an actual headline on a column by Flora Lewis of, yes, the New York Times.