Scotiabank says not "systemically important" to Canada
By Louise Egan
MEXICO CITY (Reuters) - The head of Bank of Nova Scotia (BNS.TO: Quote) suggested on Friday that Canada's third largest bank should be exempt from tougher global regulations that will eventually be imposed on banks considered "systemically important" domestically.
Chief Executive Rick Waugh cited his company's heavy reliance on operations outside Canada as a feature that set it apart in the handful of banks that dominate in Canada, and could make it exempt from extra regulatory scrutiny.
Leaders from the Group of 20 advanced and emerging countries have already agreed to impose a capital surcharge on the world's biggest banks, as part of a broader regulatory push aimed at preventing global financial crises and taxpayer-funded bailouts.
Now they are turning their sights to so-called domestic SIFIs, or systemically important financial institutions, banks deemed big enough to cause harm to their country's financial system should they run into trouble.
The Financial Stability Board, the G20's regulatory task force, has said it would complete work on this framework by the end of this year.
Although no criteria have been set for deciding which banks would be targeted, Waugh said Canada's big banks should not all be treated the same.
"I think we have to be very careful on that because the business models are different and that's a healthy thing. That's what you should want. You don't want everybody the same because then we all become systemic," Waugh told Reuters on the sidelines of a meeting of the International Institute of Finance in Mexico City.
Scotiabank, as the bank is commonly known, has long billed itself as Canada's most international bank, with operations in more than 50 countries, particularly in Latin America and Asia. It has said it wants to continue to increase its foreign business, targeting assets shaken loose from banks that have been hit by the fallout of the European debt crisis. Continued...