News from Reuters - 09/10/08
Canada rated world's soundest bank system: survey


By Rob Taylor


CANBERRA (Reuters) - Canada has the world's soundest banking system,
closely followed by Sweden, Luxembourg and Australia, a survey by the World
Economic Forum has found as financial crisis and bank failures shake world
markets.


But Britain, which once ranked in the top five, has slipped to 44th place
behind El Salvador and Peru, after a 50 billion pound ($86.5 billion)
pledge this week by the government to bolster bank balance sheets.


The United States, where some of Wall Street's biggest financial names have
collapsed in recent weeks, rated only 40, just behind Germany at 39, and
smaller states such as Barbados, Estonia and even Namibia, in southern
Africa.


The United States was on Thursday considering buying a slice of debt-laden
banks to inject trust back into lending between financial institutions now
too wary of one another to lend.


The World Economic Forum's Global Competitiveness Report based its findings
on opinions of executives, and handed banks a score between 1.0 (insolvent
and possibly requiring a government bailout) and 7.0 (healthy, with sound
balance sheets).


Canadian banks received 6.8, just ahead of Sweden (6.7), Luxembourg (6.7),
Australia (6.7) and Denmark (6.7).


UK banks collectively scored 6.0, narrowly behind the United States,
Germany and Botswana, all with 6.1. France, in 19th place, scored 6.5 for
soundness, while Switzerland's banking system scored the same in 16th
place, as did Singapore (13th).


The ranking index was released as central banks in Europe, the United
States, China, Canada, Sweden and Switzerland slashed interest rates in a
bid to end to panic selling on markets and restore trust in the shaken
banking system.


The Netherlands (6.7), Belgium (6.6), New Zealand (6.6), Malta (6.6)
rounded out the WEF's banking top 10 with Ireland, whose government
unilaterally pledged last week to guarantee personal and corporate deposits
at its six major banks.


Also scoring well were Chile (6.5, 18th) and Spain, South Africa, Norway,
Hong Kong and Finland all ending up in the top 20.


At the bottom of the list was Algeria in 134th place, with its banks
scoring 3.9 to be just below Libya (4.0), Lesotho (4.1), the Kyrgyz
Republic (4.1) and both Argentina and East Timor (4.2).


RANKINGS


1. Canada
2. Sweden
3. Luxembourg
4. Australia
5. Denmark
6. Netherlands
7. Belgium
8. New Zealand
9. Ireland
10. Malta
11. Hong Kong
12. Finland
13. Singapore
14. Norway
15. South Africa
16. Switzerland
17. Namibia
18. Chile
19. France
20. Spain

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