Friday, November 14, 2008

Just to be clear: It was Paul Martin who saved us from......

bank mergers and the reciprocal foreign ownership of Canadian banks.

Canadian PM: Speculative That Bank-Merger Ban Helped Avoid Woes

OTTAWA (Dow Jones)--Canadian Prime Minister Stephen Harper said Friday it was
"speculative" to say that domestic banks avoided the same kind of problems faced
by global counterparts because they are prohibited from merging.

"I have asked the question - if we had allowed bank mergers do we think we
would be in a substantially different situation today? Most of the experts I've
talked to do not share that view. But it is speculative," Harper said at a
televised news conference in Winnipeg.

He said it was "solid" regulation that has kept the banking system strong.

"That solid system of regulation has created a culture of prudence in our
banking system," he said.

Harper's comments were partially echoed in a speech by Julie Dickson, head of
the Office of the Superintendent of Financial Institutions, or OSFI, the
country's chief banking regulator. The speech, made at an insurance forum
Thursday, was published on the OSFI Web site Friday.

"A lot of past decisions made in Canada have served the system well (for
example, high capital targets, attention to quality of capital, and the leverage
ratio in the banking industry)," she said. Dickson also noted that Canadian
banks have "platinum quality" capital, since their Tier 1 capital is comprised
of a high percentage of common equity. Canadian bank capital ratios are also
higher than the global average, she said.

" We have seen recently how strong capital cushions in Canada have paid off to
the benefit of our institutions and overall financial system," Dickson said.

Nevertheless, she added, the situation faced by the global financial-services
industry is "indeed serious", which is why the regulator has taken some action.

Among recent actions, OSFI has requested that Canadian banks and life insurers
request its permission before making any share buy-backs. The regulator has also
provided added flexibility for the banks to issue preferred shares and have them
included as Tier 1 capital, and it has changed capital requirements for life
insurers related to segregated fund guarantees.


Joseph said...

Thanks for saying this. I always find it a little surreal to watch Harper's tap-dancing act in which he attempts to

1) proclaim the great foresight of "Canadians" in maintaining a healthy economy by creating and upholding strong economic systems and policies

while simultaneously

2) downplaying the negative outcomes that would have resulted if conservatives had controlled government for 16 of 18 years and executed policies precisely like those that have caused such havoc to the south.

He managed to do it with such a straight, cold face. It makes me cringe every time.

Dr Mike said...

Harper has told Canadians so many times that he is the "King of Fairness" that he even believes it.

As the Cons playbook says , if you tell a lie often enough they will believe.

It appears that even Steve is not immune.

Dr Mike Popovich.