"The whole thing didn't make common sense to me," TD CEO Ed Clar

TD is one of the few large North American banks -- and the only one of Canada's big six banks -- with no writedowns linked to the subprime market. Ed Clark, TD's chief executive, has trumpeted this fact.

2005 Annual Report：

“We also made the difficult business decision to exit our global structured products business in Wholesale Banking. While the short-term economic cost to the Bank is regrettable, I am pleased that we have taken the steps we have and that we can continue to focus on growing our businesses for the future to deliver long-term shareholder value.”

How did CEO Clark make the decision both to avoid exposure to the U.S. subprime market and to shed the firm's exposure to structured mortgage products and derivatives? "I'm an old-school banker," Clark told a reporter in May 2008. "I don't think you should do something you don't understand, hoping there's somebody at the bottom of the organization who does."[4]

Clark said he spent several hours a week meeting with experts to understand the financial products being traded by the bank's wholesale banking unit. "The whole thing didn't make common sense to me," Clark said. "You're going to get all your money back, or you're going to get none of your money back. I said, 'Wow! if this ever went against us, we could take some serious losses here.'"[2]

 

Clark recalled that stock analysts at the time wrote that he was an "idiot" for taking his long-term perspective.[6] Yet, as the crisis hit, the company could report that it held no exposure to U.S. subprime mortgages, no direct exposure to third-party asset-backed commercial paper except for exposure of its mutual funds and asset management group, and no direct lending exposure to hedge funds, with only nominal trading exposure.[7] Because TD Bank came through the crisis intact, it was able to begin systematic expansion from its Canadian base into the U.S. market. By 2013, through a series of acquisitions, TD Bank had become one of the 10 largest U.S. banks, with branches extending along the East Coast from Maine to Florida.