OTTAWA, Aug. 18 /CNW Telbec/ - Following similar international reports
by the Financial Stability Board (FSB) and the Basel Committee on
Banking Supervision (BCBS), the Bank of Canada today published a
comprehensive assessment of the potential impact on the Canadian economy
of new global capital and liquidity standards, which are to be finalized
later this year by the G-20.
Using state-of-the-art modelling techniques, and a range of conservative
assumptions, Bank of Canada staff ran simulations to provide different
perspectives on the possible outcomes of the new standards. This report
summarizes the Bank's core results for Canada, and compares them with
the results recently published by the FSB and the BCBS.
The report finds significant net benefits for Canada from the new
banking rules resulting from the decreased likelihood of future
financial crises. The macroeconomic costs of implementing the new
standards in Canada are found to be small and broadly similar to those
of other jurisdictions.
When the benefits and costs are assessed on a present-value basis, the
estimated net economic benefits to be gained over time from improving
the safety and robustness of the Canadian and international financial
systems amount to about $200 billion for Canada--equivalent to about 13
per cent of GDP.
"The recent global financial crisis left a legacy of damaged economies,
failed financial institutions, lost jobs, and higher fiscal deficits.
Canada was not immune. It too was buffeted by financial shocks from
abroad, and could not escape the spillover effects of the ensuing global
economic downturn," said Governor Mark Carney. "It is thus clearly in
Canada's interest to work with other countries to develop stronger
international capital and liquidity standards. This will improve the
robustness of our own banking system, and contribute to the promotion of
global financial stability."
SOURCE Bank of Canada
For further information: For further information: