The Illusion of Choice: How Canadian Banking Actually Works

Canada's banking system is dominated by just six major institutions (the Big Five plus National Bank), which control over 80% of banking assets. While this concentration was designed for stability, it creates limited competition and flexibility compared to the U.S., which has thousands of banks with diverse underwriting philosophies.

• Illusion of choice: Canadians feel like they have banking options, but are essentially rotating through six institutions that behave similarly in terms of rates, underwriting, and credit requirements.
• Designed for stability, not competition: Canada's concentrated banking system was intentionally created post-Depression to prioritize safety over flexibility, which helped avoid failures during the 2008 crisis but limits competition.
• Different bank personalities: Each of the Big Six has distinct lending approaches—RBC prefers "vanilla" borrowers, TD is systems-driven, Scotia is unpredictable, BMO is business-friendly, CIBC is mortgage-aggressive, and National Bank is regionally focused.

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