Do Housing Finance Systems in Other Countries Offer Insights that can Help Inform US Reform Choices?
The Canadian Example The Canadian housing finance system, and Canadian banks, have come through the financial crises of 2007-09 in far better shape than their U.S. counterparts. A recent AEI conference, “Canadian vs. U.S. Housing Finance: Comparison and Implications” (February 18, 2010), addressed a number of factors which make Canada’s mortgage credit practices more conservative and less vulnerable than those of the U.S. Suppose we agree that we would like our society to have widespread home ownership and a property-owning democratic citizenry. Does it take government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac, with “implied” taxpayer guarantees; tax advantages for the interest paid on home mortgages; and government pressure for “creative,” that is, riskier, mortgage lending to achieve this? The Canadian experience shows that it doesn’t. Canada makes a useful comparison for the U.S. It is in population and economic size much smaller of course, but otherwise very simi
