One of the few assets that have gained value amid the global financial crisis is Canadian pride — pride in a banking system that hasn’t failed, or even shown much sign of weakness, while those in the rest of the world are crumbling. But, beware. Pride goeth before a fall.

The Canadian banking system has, so far, traversed the financial crisis exceptionally well. Now, with the shrinkage of their much bigger rivals, Canadian banks are once again among the world’s leading players.

Our apparent outperformance has been attributed to unique Canadian virtues: our banks are said to be smarter, our risk management tougher, our households more prudent and, yes, our regulators are supposedly sharper. A recent paper from TD Economics suggests that a risk-averse culture in Canada pervades domestic banks, government and consumer spending, generating a virtuous cycle that has made the Canadian financial system the envy of the world.

But this view hardly stands up to scrutiny. There is no doubt that the Canadian banks have fared much better than most others around the world, but that is because of more luck than design.

If our firms are that much smarter, why did they have any exposure to the increasingly precarious U.S. housing market? And if our regulators have such great foresight, why weren’t they sounding the alarm about the impending systemic catastrophe?

Undoubtedly, there are some prescient bankers in Canada who have steered their firms clear of excesses. But there are many foolish, greedy ones here, too. Similarly, disparities in household behaviour between Canada and the rest of the world are differences of degree, not of kind. Policy-makers have been lucky that the sector has proven less exposed, but it was hardly part of a well-conceived plan. Apathy, if not antipathy, is the dominant attitude of government toward the financial industry.

For now, the financial services sector is in triage mode, but when it does finally recover we cannot confuse a lucky escape for the inherent superiority of our national character. Nor should we see bureaucratic indifference to financial services-sector policy as a well-considered virtue that the rest of the world would do well to imitate. The passivity of Canadian policy-makers may have inadvertently served us well in this financial crisis, but it is no way to build a sustainable future.