Scotiabank Canadian Legislative Covered Bonds Presentation

Canadian Economy and Financial System • • • • Canadian Economy The 10th largest economy in the world, with a strong export orientation Economy diversified, with particular strength in service, primary, manufacturing, construction, and utility sectors Proactive governments and central bank Manageable government deficits and debt burdens Improving growth outlook, with firmer commodity prices, resilient consumer activity, and strengthening U.S. demand for Canadian goods and services Strong Financial System Effective regulatory framework Principles-based regime - Single regulator for major banks Conservative capital requirements Proactive policies and programs Risk-management practices - - - Conservative lending standards Few sub-prime mortgages Relatively little securitization Primarily originate-to-hold model Canadian banks well-capitalized and profitable 38

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