Canada a mentor: Carney
Canada’s banking system is the envy of the world and it could evenmentor other countries as it copes with the worldwide recession, saidthe governor of the Bank of Canada yesterday in his hometown.
Canada’s banking system is the envy of the world and it could even mentor other countries as it copes with the worldwide recession, said the governor of the Bank of Canada yesterday in his hometown.
During a lecture to business leaders with the University of Alberta’s School of Business, Mark Carney suggested Canada should engage world leaders during the upcoming G20 meeting in London this week to consider regulating its own financial systems.
“Our system is better,” said Carney, who grew up in Edmonton. “Regulation has been more consistent. Our banks have been more conservative. Credit conditions remain superior to those in virtually every other industrialized country.”
Alberta Finance Minister Iris Evans agrees Canada can become a leader, and says Alberta’s own government can dig itself out the recession by 2010.
“I am hopeful that’s when all governments can see a full recovery,” Evans said.
Carney said Canada is also in a good position to give advice to world leaders because the core of the system “has many — although not all — of the elements of a more sustainable, global financial system.”
However, Carney said tightly regulating a bank’s core functions, like making loans, is a bad idea.
“To this way of thinking, banks could not then get themselves into trouble, or if they did, their demise could be safely managed,” said Carney. “This is impractical, because banks and their roles are vital to the existence of markets.
“They are agents and underwriters and traders of most government and corporate debt. They provide cross-border financing products, which are key services in a global corporation.”