Dangerous Opportunities: The Future of Financial Institutions, Housing Policy, and Governance
Published: August 2021© 2021
Imprint: Rotman-UTP Publishing
Page Count: 208 Pages
Illustrations: 1 b&w table
Dimensions: 6.25 x 9.25
208 Pages, 6.25 x 9.25 x 0.75 in, 1 b&w table
The 2017 Home Capital saga represents the shortcomings of a financial system challenged by distinct, siloed regulatory frameworks that fail to communicate with each other. Home Capital is a publicly traded company that acts as a lender through the Home Trust Company, most often providing mortgages to clients rejected by traditional banks. Home Capital’s 2017 announcement that it required $2 billion to sustain a $600-million loss shook customer confidence, and fueled by allegations of corruption, the company suffered a rapid decline in stock price.
The Home Capital crisis is the most recent pre-pandemic example of systemic risk in the financial sector in Canada and highlights the invaluable opportunity we have to avoid repeating past mistakes in the nearing post-pandemic economic reality.
Using the 2017 Home Capital saga as a starting point, Dangerous Opportunities sheds light on the compartmentalization of regulators and its greater ramifications on board independence and corporate governance, taxation in the competitive housing sector, and the success of non-bank financial institutions in various jurisdictions. A hybrid of law and business, Dangerous Opportunities is a must-read for those interested in the underbelly of financial institutions and is an inspired read in the aftermath of the recent housing crisis, which saw many aspiring homeowners seek dangerous opportunities outside of the traditional banking system.
1 Governance Challenges in Times of Crisis
2 Hoopp and Home Capital: Pension Funds as Good Governors and Crisis Managers
3 Securities Regulators and Investor Education
Gail E. Henderson
4 Home Capital and Cross-Border Lessons in Mortgage Regulation
5 Tax Reform: A Missing Piece in Canada’s National Housing Policy
Conclusion. Dangerous Opportunities: Lessons Learned for the Pandemic Recovery Efforts
"Dangerous Opportunities is a timely examination of the Home Capital crisis, the ways in which the regulatory regimes engaged by the crisis – corporate, pension, securities, taxation, and mortgage – both facilitated and helped to resolve it, and the lessons that can be learned for law and policy reform going forward. Regulators, policy makers, legislators, academics, and lawyers will find it a useful and accessible text."Freya Kodar, Faculty of Law, University of Victoria
“Dangerous Opportunities provides valuable perspectives on a complex mix of issues associated with the near collapse of Home Capital and the regulatory context in which the saga played itself out - issues of considerable importance as Canada continues to grapple with rapid growth in non-bank private lending. The reader will leave this book with a deeper appreciation for the range of hard questions that Canadian policy makers must address as they deal with the rise of alternate lenders.”Robert Yalden, Stephen Sigurdson Professor in Corporate Law and Finance, Faculty of Law, Queen’s University
"This important volume provides critical insights into governance and public policy. It uses the 2017 Home Capital crisis to delve into the regulation of financial institutions. But it also goes much further. The contributors to this volume show how the lessons from the Home Capital crisis are applicable to the current crisis precipitated by the COVID-19 pandemic and, alas, to future crises as well. This volume is a timely and informative read for leaders in both the private and public sectors, policy-makers, scholars, regulators, and investors."Adam Dodek, Professor and Dean, Faculty of Law, University of Ottawa
"The Canadian housing sector usually attracts more heat than light, but Dangerous Opportunities is a penetrating and sobering study of the Home Capital saga of 2017. This insightful book by Stephanie Ben-Ishai and others clarifies how the behaviour of one small firm has the potential to infect the rest of the financial system and put the entire economy at risk. It serves as a poignant reminder that an ounce of prevention is still worth a pound of cure."Stephen Poloz, Special Advisor, Osler Hoskin & Harcourt, former Governor of the Bank of Canada, and author of The Next Age of Uncertainty
Related Blog Posts
An Opportunity We Cannot Afford to Miss: Applying Hard-Won Lessons from Prior Crises to Post-Pandemic Economies
Dangerous Opportunities examines the Home Capital crisis of 2017, a watershed moment in Canadian financial markets. Stephanie Ben-Ishai discusses how we can avoid repeating past mistakes in the nearing post-pandemic economic reality.