OTTAWA (Reuters) - Finance Minister Jim Flaherty plans to meet with top banking executives next week to urge them to adopt reforms endorsed by the G7 and aimed at soothing the global credit market crisis.
“We agreed in the G7 that we would move ahead with the Financial Stability Forum reforms and I want Canada to be on that page,” Flaherty told reporters.
Policy-makers from the world’s seven most industrialized countries pledged over the weekend to implement a list of recommendations for ridding the international financial system of the flaws that led to the crisis.
The proposals were offered in a report by the Financial Stability Forum, which comprises central bankers and global regulators.
Within 100 days, they agreed to tell banks to reveal the extent of their losses and exposure to toxic assets like U.S. subprime mortgage-backed securities, using a template for valuing those assets that is included in the report.
When asked what his message to the banks would be, Flaherty said, “The importance of going ahead and using the leading practices that are prescribed now by the Financial Stability Forum. Our banks are pretty good in accomplishing that already, but we need to have uniformity,” he said.
Bank of Nova Scotia, Canada’s third-largest bank, was among a select group of global banks that met with G7 officials in Washington. Chief Executive Richard Waugh told Reuters on Friday the private sector agreed with some of the recommendations but said banks preferred guidance on “best practices” rather than prescribed regulation.
Flaherty praised the Canadian regulator, the Office of the Superintendent of Financial Institutions, for making sure banks met capital requirements, helping them stay healthy, while some big international banks headquartered in the United States or Europe have suffered damaging writedowns.
“Our banks are better capitalized and that puts our banks in a better position,” said Flaherty.
Reporting by Louise Egan; editing by Rob Wilson