Quebec finance minister Raymond Bachand is calling for co-operation between the federal and provincial governments on a possible national regulator for systemic risk.

In remarks last week in Davos, Switzerland, federal finance minister Jim Flaherty acknowledged the Supreme Court of Canada’s decision that securities regulation falls largely under provincial jurisdiction — dashing his hopes for a comprehensive national securities regulator.

However, Flaherty also expressed hope that, along with the provinces, the federal government could create a national regulator to deal with issues that the court suggested may be national ones, such as the monitoring of systemic risk, and possibly derivatives.

Bachand said he’s pleased that Flaherty has accepted that the provinces have jurisdiction over the securities industry, and he noted that Flaherty has indicated a desire to improve the stability of the financial system, in collaboration with the provinces. “I hope that the potential improvement of measures for preventing systemic risk becomes an example of co-operative federalism, not a new bone of contention,” he said.

“I would be happy to discuss with Mr. Flaherty and my colleagues from the provinces and territories, in the coming months, the terms that may apply to this collaboration on financial sector stability, while respecting the constitutional jurisdictions of all the parties,” Bachand added.