Canada’s banks, financial regulators and the Canadian government have a unique opportunity to build on our financial sector’s current position of strength to develop a vision of financial services as a key strategic industry for this country, says the CEO of the Canadian Bankers Association.

“As we emerge from the global financial crisis, now is the time for government and regulators to pause and reflect, to consider how, together with our banks, they can help maintain Canada’s competitive advantage in financial services,” said Nancy Hughes Anthony, in a speech Monday to the Economic Club of Canada in Ottawa.

Hughes Anthony called for a shared commitment to making Canada’s financial services industry a world leader.

In support of this position, she highlighted that, while there have been 150 bank failures in the United States and hundreds of billions of dollars in taxpayer-funded bailouts, Canada has not had a single bank failure and the Canadian government has not had to use taxpayers’ money to bailout Canada’s banks.

Hughes Anthony cautioned policy makers against rushing into decisions without fully understanding or considering their long-term implications.

“Prudent regulation has certainly helped our financial sector achieve its current level of success while protecting Canadians, but it has not been responsible for the banks’ growth or their own risk management,” Hughes Anthony said.

“The key will be to give banks the maximum amount of freedom to grow, balanced with the minimum level of regulation necessary for protection. Changes to regulation should be limited and implemented only after thorough consultation with those whose businesses stand to be affected.”

Hughes Anthony pointed to four main areas of action to help Canada’s financial system capitalize on its current strengths:

• a principles-based approach to regulation of the financial sector, which avoids the dangers of over-regulation and regulation that is too prescriptive;

• a national, uniform approach to the regulation of financial services that includes a single securities regulator;
• legislation to protect both consumers and financial institutions from financial crimes; and

• maintaing the course with respect to the direction of current taxation policies.

Hughes Anthony concluded her presentation noting that it will be through cooperative efforts that a truly visionary national strategy for financial services will emerge, to the benefit of all Canadians.

IE