TORONTO, Sept. 10 /CNW/ - G-20 ministers should avoid creating a new
layer of regulation to counter future systemic financial risks, according to a
newly released C.D Howe Institute study. The Commentary by Nick Le Pan, former
Superintendent of Financial Institutions, cautions against current G-20
proposals to expand regulation to include system-wide macroeconomic risks.
"Priority should be on improving the existing system from lessons learned,
before we put all our energy into a new macro-prudential system," Le Pan said
in the study, Look Before You Leap: A Skeptical View of Proposals to Meld
Macro- and Microprudential Regulation.
Without more clarity on goals and responsibilities, adding responsibility
for system-wide risk to the mandates of the Bank of Canada, the Superintendent
of Financial Institutions (OSFI) and other regulators risks unproductive
overlap and loss of focus, said Le Pan. Instead, he recommends that the
finance minister should create a legislated financial stability committee,
with the Bank of Canada, OSFI, and key securities regulators among the
members. It should be separate from the existing, successful federal committee
that deals with individual problems at banks and insurers. The finance
ministry should coordinate the financial stability assessment process and
chair the committee. That approach will build on our strengths, he concluded.
For the study click here. http://www.cdhowe.org/pdf/commentary_296.pdf
For further information:
For further information: Nick Le Pan, Senior Fellow, or Finn Poschmann,
Vice President, Research, C.D. Howe Institute, (416) 865-1904